Management Earnings Forecasts and Other Forward-Looking Statements
60 Pages Posted: 15 Aug 2012 Last revised: 1 Jun 2018
Date Written: July 10, 2017
We identify forward-looking statements (FLS) in firms’ disclosures to distinguish between “forecast-like” (quantitative statements about earnings) and “other”, or non-forecast-like, FLS. We show that, like earnings forecasts, other FLS generate significant investor and analyst responses. Unlike earnings forecasts, other FLS are issued more frequently when uncertainty is higher. We then show that earnings-related FLS are more sensitive to uncertainty than quantitative statements, suggesting that managers are more likely to alter the content than the form of FLS when uncertainty is higher. Our study indicates that incorporating other FLS into empirical measures provides a more comprehensive proxy for firms’ voluntary disclosures.
Keywords: Earnings Announcements, Voluntary Disclosure, Management Forecasts, Qualitative Disclosures
JEL Classification: D8, M4
Suggested Citation: Suggested Citation