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Learn to Play the Earnings Game (and Wall Street Will Love You)
R. Dowen (1996)
Analyst Reaction to Negative Earnings for Large Well-Known Firms, 23
(1996)
The Torpedo Effect: The Subtle Risk of High Expected Growth
Regulation Is Altering the Way Anal>«ls Approach Their Jobs
Remarks to thf 39th Annual Corpoi-ate Counsel InstiuUf
Accuracy Improvements IVom a Clonsensus ol Updated Individual Analyst Earnings Eorecasts
John Easterwood, S. Nutt (1999)
Inefficiency in Analysts' Earnings Forecasts: Systematic Misreaction or Systematic Optimism?Journal of Finance, 54
(1999)
\ND R. McGoi.c;)
Stock Options Take Hidden Toll on Profit
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Ron Kasznik, B. Lev (1995)
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D. Collins, S. Kothari (1989)
An analysis of intertemporal and cross-sectional determinants of earnings response coefficientsJournal of Accounting and Economics, 11
F^mings Manipulation to Exceed Thresholds
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Analysts' Earnings Estimates Are Diverging, and SE(^ Disclosnre Rule May Be the Reason
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Estimates and the Cross-section of Stock Ke\.un\%
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Timely Aggregate Analyst Forecasts as Better Proxies for Market Earningŝ i.lmrM.e'i
Douglas Skinner (1994)
WHY FIRMS VOLUNTARILY DISCLOSE BAD-NEWSJournal of Accounting Research, 32
M. Bradshaw, Matthew Moberg, Richard Sloan (2000)
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David Dreman, Michael Berry (1995)
Overreaction, Underreaction, and the Low-P/E EffectFinancial Analysts Journal, 51
(1999)
Ho-hum, Another Earnings Sui-prise.
Remarks delivered at the NYU Center for Law and Busines.s
Dawn Matsumoto (1999)
Management's Incentives to Guide Analysts' ForecastsFinancial Accounting eJournal
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Earnings Surprises, Growth Estimates and Stock Rfturns or Don't Let a Torpedo Sink Vonr Portlulio " Working paper, L'niversity of Michigan
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Analysts'Ftirecasts As Earnings Expectalions
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Earnings Hocii.s-Pocus: How Cx)mpanios O>me Up with the Numbers They Want
I show that median earnings surprise has shifted rightward from small negative (miss analyst estimates by a small amount) to zero (meet analyst estimates exactly) to small positive (beat analyst estimates by a small amount) during the 16 years, 1984 to 1999. I show that a rightward temporal shift in median surprise from negative to positive describes earnings, but neither profits nor losses. Median profit surprise shifts within the positive quadrant, from zero to one cent per share. Median loss surprise shifts within the negative quadrant from extreme negative (about ‐33 cents per share) to zero. I show that the median surprise for profits exceeds that for losses in every year. I document significant positive temporal trends in both meet and beat analyst estimates for both profits and losses, but I find a greater frequency of profits that either meet or beat analyst estimates in every year. I find a significant positive temporal trend in positive profits that are “a little bit of good news,” and a significant negative temporal trend in managers who report losses that are an “extreme amount of bad news.” My results are robust to the four internal validity threats I consider—namely temporal changes in: (1) analyst forecast accuracy, (2) the mix of earnings of one sign preceded by earnings of another sign four quarters ago, (3) the timeliness of the most recent analyst forecast, and (4) the I/B/E/S definition of actual earnings. I find that managers of growth firms are relatively more likely than managers of value firms to report good news profits. I show that when they do report positive profit surprises, managers of growth firms are more likely to report “a little bit of good news” in every year.
Journal of Accounting Research – Wiley
Published: Sep 1, 2001
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