A new report from Greenwich Associates says that the number of U.S. companies that provide earnings and financial guidance to the market plummeted in the past year.

It’s a trend, Greenwich says, can probably be attributed in part to the current corporate environment and new regulations such as the SEC’s new regulation on full disclosure.

In 2003, 72% of U.S. companies offered earnings and financial guidance. According to new research from the Greenwich, Conn.-based financial services consultant, that number fell sharply to just 55% in 2004, and nearly 10% more expect to halt this type of communication in the future.

Based on interviews with 385 CFOs, treasurers, and other corporate finance executives at large U.S. corporations, the Greenwich research shows the decline in the number of companies providing the market with these types of communications is relatively consistent across companies of various credit rating and size, although a slightly higher percentage of Fortune 300 companies (60%) are offering earnings and financial guidance.

“At a minimum, our data suggests that the current regulatory environment has heightened sensitivity to the possible consequences of releasing information that is misleading, advantageous to a particular group that gets it first, or simply wrong,” says Greenwich consultant John Colon. “While that might not be a bad outcome from an enforcement perspective, it seems counterproductive if the regulatory environment is indeed driving down the frequency of forward-looking communications and forecasting.”

The report also reveals that Wall Street is scaling back its research coverage. U.S. companies continue to report reductions in the number of sell-side analysts covering them. Greenwich said 22% of U.S. companies said the number of analysts covering them fell last year. While that result is down from the nearly 30% that reported a cutback in 2003, it nevertheless demonstrates that the sell-side pullback is continuing.

With many investment banking firms rationing their resources according to the profitability of their client accounts, it’s not surprising that the largest companies are having an easier time maintaining coverage, with just 17% of the Fortune 500 and 14% of the Fortune 300 experiencing reductions in analyst coverage in 2004. Meanwhile, more than a quarter of companies without a bond rating say they lost analyst coverage in the same period.

Telecommunication and pharmaceutical companies appear to be hardest hit in 2004, with 45% of pharmaceuticals and 43% of telecoms reporting coverage reductions. By contrast, in a year-to-year comparison with 2003, far fewer companies reported analyst coverage reductions in the auto and auto parts, chemicals, general industrial, healthcare, and technology industries. “While the trend of declining analyst coverage may be slowing, it remains a fact of life for many companies, and it is putting additional pressure on stock prices from the investor relations perspective.” says Colon.