Earnings Seasons: Analysis of Inferred and Announced News

42 Pages Posted: 19 Apr 2015

See all articles by Curtis M. Hall

Curtis M. Hall

Drexel University - Bennett S. LeBow College of Business

Jayanthi Sunder

University of Arizona - Eller College of Management

Shyam V. Sunder

University of Arizona - Department of Accounting

Date Written: April 17, 2015

Abstract

Earnings announcements are clustered in calendar time and such clusters, referred to as earnings seasons, are characterized by intense arrival of information from firms in an industry. The news arrives not only from earnings announcement by the firm, announced news, but also from pre-emptive inference of news from peer firm announcements, inferred news. We find that announced news appears to be underweighted for firms that announce later in the earnings season and this is not explained by a higher level of inferred news for these firms. This suggests that as the season progresses, investors appear to pay less attention to firm earnings, particularly in the case of good news. Finally, the tone of the season, i.e. nature of news announced on the first day of the season, affects the reaction to announced news of subsequent announcers. Our results highlight the importance of viewing earnings announcements in the context of the earnings season.

Suggested Citation

Hall, Curtis M. and Sunder, Jayanthi and Sunder, Shyam, Earnings Seasons: Analysis of Inferred and Announced News (April 17, 2015). Available at SSRN: https://ssrn.com/abstract=2595804 or http://dx.doi.org/10.2139/ssrn.2595804

Curtis M. Hall (Contact Author)

Drexel University - Bennett S. LeBow College of Business ( email )

Philadelphia, PA 19104
United States

Jayanthi Sunder

University of Arizona - Eller College of Management ( email )

School of Accountancy
1130 E Helen St.
Tucson, AZ 85721
United States
520-626-8489 (Phone)

Shyam Sunder

University of Arizona - Department of Accounting ( email )

210 L McClelland Hall
1130 E Helen St
Tucson, AZ 85721
United States

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