Dillard Department Stores' stock fell sharply after analysts cut their projections for the company's short-term earnings.

They dumped their shares, fearing a possible reduction in short-term earnings.

"While the short-term earnings may be disappointing," he said, "the longer-term prospect of this company in terms of its market position is excellent."

But everyone is scared about the impact on short-term earnings.

Thus, the thrust of their effort might well be to improve short-term corporate earnings - a consequence that should probably not be welcomed.

But slower growth could also create more short-term earnings problems for American companies, which would be a negative for equities.

After all, such managers are often under intense pressure to reduce their spending on research, thus increasing short-term earnings and helping to raise the stock price.

I have some concern that the great emphasis on short-term earnings has made top business managers more inward-looking in terms of bottom-line orientation.

But instead of investing adequately in that data and those systems, management aimed for higher short-term earnings.

"We have no doubt that short-term earnings are being managed in many, if not all, companies," the two professors concluded.