Evidence on the possible underweighting of earnings-related information
Article Abstract:
Three hypotheses related to the possible underweighting of earnings-related information were tested. The hypotheses were related to the issues of the underestimation of the permanent component of earnings forecast errors by analysts, investors' use of analysts' revisions of earnings forecasts to reveal the persistence of previous forecast errors, and investors' underestimation of the persistence of previous forecast errors evident in forecast revisions. Quarterly earnings per share (EPS) data from the Compustat Quarterly Industrial File, analysts' forecasts of EPS from the Value Line Investment Survey, and return data from the CRSP Daily Return File were used to test the hypotheses. Research results reveal that the market underweights earnings-related information.
Publication Name: Journal of Accounting Research
Subject: Business
ISSN: 0021-8456
Year: 1991
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Bad news and differential market reactions to announcements of earlier-quarter versus fourth-quarter earnings
Article Abstract:
Research examines whether or not security market reaction to poor earnings is dependent on the fiscal quarter in which the earnings are announced. It is hypothesized that the securities market will have a greater reaction to poor results announced during the first three quarters because managers have the legitimate means and the natural tendency to delay bad news until the last quarter. Results indicate that unexpectedly poor earnings announced during the first three quarters have a larger per-unit effect on risk-adjusted security returns than do those announced during the last quarter. A discussion by Krishna G. Palepu is included.
Publication Name: Journal of Accounting Research
Subject: Business
ISSN: 0021-8456
Year: 1988
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Comparing the post-earnings announcement drift for surprises calculated from analyst and time series forecasts
Article Abstract:
The impact of earnings projection differences, on stock returns, is examined. Methods of time series analysis are used for the study.
Publication Name: Journal of Accounting Research
Subject: Business
ISSN: 0021-8456
Year: 2006
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