Discretionary management earnings forecast disclosures: antecedents and outcomes associated with forecast venue and forecast specificity choices

Article Abstract:

A study examined the impact of disclosure-related costs on the decision of managers regarding the specificity and venue of disclosure of earnings forecasts. In addition, it determined the implications of other venue and specificity options. Data on the management forecasts from a sample of 151 New York Stock Exchange-listed firms were collected from the Dow Jones News Retrieval Service for 1981 to 1991. Findings revealed that managers tend to announce forecasts in special press releases when the risk of legal liability is high, although the disclosures tend to be less specific. Moreover, managers are less prone to reveal forecasts in special press releases if the proprietary information costs are higher. In addition, managers' forecasts released in meetings with analysts and reporters are more reliable and less positive compared to forecasts made in other venues. Other findings are discussed.

Disclosure (Securities law), Business forecasting

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Relationship between differential amounts of prior information and security return variability

Article Abstract:

The relationship between the amount of information available about a firm before annual meetings and the stock return variability at annual earnings announcements is examined. The number of securities analysts' annual earnings forecasts and the market value of the firm's common equity are used to measure the amount of prior information available. Data was collected from 348 firms listed in the Institutional Brokers Estimate System database using December 31, 1980 fiscal year-ends and 400 firms with December 31, 1981 year-ends. Results indicate an inverse relationship between the measures of the amount of prior information and security return variability around annual earnings announcements.

Accounting, Earnings per share

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The information content of annual earnings releases: a trading volume approach

Article Abstract:

The relationship between firm size, unexpected earnings, and trade volume are discussed. Four hypotheses are examined: that trade volume increases when annual earnings reports are released, that trade volume increases in proportion to how much larger earnings are than expected, and that these effects are greater with smaller firms. The research design, the variables are thoroughly examined. The results, which support the hypotheses, are considered, as are other findings.

Analysis, Profits, Corporation reports, Company reports, Corporate profits

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