Market (In)Attention and the Strategic Scheduling and Timing of Earnings Announcements

Abstract

We investigate whether managers “hide” bad news by announcing earnings during periods of low attention, or by providing less forewarning of an upcoming earnings announcement. Our findings are consistent with managers reporting bad news after market hours, on busy days, and with less advance notice, and with earnings receiving less attention in these settings. Paradoxically, our findings indicate that managers also report bad news on Fridays, but we do not find lower attention on Fridays. Further, we find negative returns when the market is notified of an upcoming Friday earnings announcement, which is consistent with investors inferring forthcoming bad news.

Keywords: Market attention, earnings announcement timing, earnings announcement scheduling, earnings announcement notifications, strategic disclosure

JEL Classification: L20, M10, M41