On the usefulness of earnings and earning research: lessons and directions from two decades of empirical research
Article Abstract:
Accounting research often has focused on assessing financial information usefulness from evidence from the capital markets. A study was conducted to determine the usefulness of information about earnings to investors, and to use this determination for an examination of accounting research in this area. The data used in the study was taken from a a sample of returns-earnings studies published in the three major accounting journals for the period 1980-88. Research results reveal that the correlation between earnings and stock prices is low, and that refinements in previous research into the relationship between earnings and stock returns has to date done little to further an understanding of the usefulness of earnings information. The results indicate that the poor quality of the information content of reported earnings contributes to the observed weak relationship of earnings to stock returns. A discussion of the usefulness of earnings and earnings research by James M. Patell follows.
Publication Name: Journal of Accounting Research
Subject: Business
ISSN: 0021-8456
Year: 1989
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Unexpected earnings and intraindustry information transfers: further evidence
Article Abstract:
The sign and magnitude of the unanticipated quarterly earnings information for corporations that release earnings reports on the current prices of the stock for same-industry corporations who do and do not release earnings information are consistent. Previous evidence of intraindustry transfers is not entirely due to covariation in firms' returns within industries. Support for information transfers is greater for tests using analysts' forecasts as earnings expectations and short returns cumulation periods near the release dates of earnings reports.
Publication Name: Journal of Accounting Research
Subject: Business
ISSN: 0021-8456
Year: 1990
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Voluntary forecast disclosure, nondisclosure, and stock prices
Article Abstract:
Managerial earnings forecasts generally differentiate companies with positive annual earnings from other companies, including those companies in the same industry. Firms that do not release earnings forecasts that are in the same industry as firms that do cannot be categorized as having poor earnings. Firms sometimes release negative earnings reports that decrease stock prices. Firms that release negative earnings reports generally reveal that information by releasing forecasts that lower stock prices.
Publication Name: Journal of Accounting Research
Subject: Business
ISSN: 0021-8456
Year: 1990
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