We have a TV on financial news in the office, and I always see reports of companies meeting their earnings estimates or failing to meet them. Even if a company misses the estimate by a very small percentage is is reported as "Company XX misses earnings!!" and their stock tends to go down.
I understand that actual earnings can't be manipulated to look better, but if an estimate is by definition not a set-in-stone accurate number why don't companies sandbag on their published estimates so they are more likely to beat them?
I guess the heart of the question is what checks are in place to make a company provide a realistic estimate? Why not generate an internal estimate and then report your target is 80% of that? Seems like beating your estimates by 20% would make you look great.