48 Pages Posted: 29 Aug 2009
Date Written: August 28, 2009
Many firms define their fiscal quarters as 13-week periods. For these firms each fiscal year contains 52 weeks, which leaves out one/two day(s) a year. To compensate, one extra week is added to every fifth/sixth year; consequently, one quarter therein comprises 14 weeks. We find evidence of predictable stock returns and forecast errors in 14-week quarters, which suggests that investors and analysts 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 investors and analysts.
Keywords: analysts, market efficiency, fiscal year
JEL Classification: G14, G17, M4
Suggested Citation: Suggested Citation