50 Pages Posted: 16 Jan 2009 Last revised: 9 Jan 2011
Date Written: January 5, 2009
Many firms define their fiscal quarters as 13-week periods so that each fiscal year contains 52 weeks, which leaves out one or two day(s) a year. To compensate, one extra week is added every fifth or sixth year and, consequently, one quarter therein comprises 14 weeks. We find evidence of predictable forecast errors and stock returns in 14-week quarters, suggesting that analysts and investors do not, on average, adjust their expectations for the extra week. The ease with which 14-week quarters can be predicted, and expectations adjusted, suggests a surprising lack of effort on the part of analysts and investors.
Keywords: Market Efficiency, Analyst
JEL Classification: G14, G24, G29, M41
Suggested Citation: Suggested Citation