Earnings announcements and competing information

Earnings announcements and competing information We investigate whether competing information, primarily analyst reports, reduces the usefulness of earnings announcements. Inconsistent with the view that information in analyst reports substitutes for earnings announcements, we find a positive relation between absolute abnormal returns to the two types of disclosures. This positive relation also characterizes subsequent period analyst reports relative to current period earnings announcements. We also find that aggregate absolute reactions to both types of disclosures increased over 1986–1995. As a whole, these results provide little support for the view that the informativeness of earnings announcements is eroded by competing information in the form of analyst reports. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Accounting and Economics Elsevier

Earnings announcements and competing information

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Publisher
Elsevier
Copyright
Copyright © 2002 Elsevier Ltd
ISSN
0165-4101
D.O.I.
10.1016/S0165-4101(02)00058-7
Publisher site
See Article on Publisher Site

Abstract

We investigate whether competing information, primarily analyst reports, reduces the usefulness of earnings announcements. Inconsistent with the view that information in analyst reports substitutes for earnings announcements, we find a positive relation between absolute abnormal returns to the two types of disclosures. This positive relation also characterizes subsequent period analyst reports relative to current period earnings announcements. We also find that aggregate absolute reactions to both types of disclosures increased over 1986–1995. As a whole, these results provide little support for the view that the informativeness of earnings announcements is eroded by competing information in the form of analyst reports.

Journal

Journal of Accounting and EconomicsElsevier

Published: Aug 1, 2002

References

  • Changes in the value-relevance of earnings and book values over the past forty years
    Collins, D.; Maydew, E.; Weiss, I.
  • To warn or not to warn
    Kasznik, R.; Lev, B.
  • Earnings disclosures and stockholder lawsuits
    Skinner, D.
  • Earnings preannouncement strategies
    Soffer, L.; Thiagarajan, R.; Walther, B.

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