Manager-Analyst Conversations in Earnings Conference Calls
48 Pages Posted: 16 Jun 2012 Last revised: 26 Jan 2018
Date Written: January 26, 2018
Prior research finds that intraday stock prices move considerably during the discussion period of earnings conference calls. In this study, we assess whether the manager-analyst dialogue during the discussion drives these price movements. We first perform a textual analysis of the tone of managers and analysts, and we find that intraday prices react significantly to analyst tone, but not to management tone, for the full duration of the discussion. This effect strengthens when analyst tone is relatively negative. We then present intraday visual evidence that analysts are more neutral than managers over the call, and that the tones of both parties drift downwards as the call progresses. Overall, our findings illustrate how manager-analyst information exchanges evolve on earnings calls and indicate that analysts are the participants on earnings calls whose comments move stock prices during the discussion.
Keywords: Conference Calls, Corporate Disclosure, Financial Analysts
JEL Classification: G14, G20, D83
Suggested Citation: Suggested Citation