Information in Mandatory and Voluntary Earnings Announcement Date Forecasts

60 Pages Posted: 23 Apr 2018 Last revised: 21 Apr 2020

See all articles by Mary E. Barth

Mary E. Barth

Stanford University - Graduate School of Business

Greg Clinch

Independent

Paul Ma

University of Minnesota

Date Written: April 20, 2020

Abstract

We investigate whether mandatory earnings announcement date forecasts are informative to investors and the informational tradeoffs between mandatory and voluntary forecasts. We find: (i) The percentages of the quarter’s earnings news conveyed by mandatory China and voluntary US forecasts are similar. (ii) Mandatory China forecasts provide information about yet-to-be-announced firm performance and convey earnings news, even for firms less likely to forecast if forecasting were voluntary and despite making the forecasts at the beginning of the reporting window. The market reacts to information in initial and revised forecasts. (iii) Voluntary US forecasts provide information primarily through the forecasted announcement date; the act of forecasting and forecast timing provide some information, but no significant incremental earnings news is conveyed by the act of forecasting or its timing. However, the majority of US firms do not issue forecasts. Information quality and yet-to-be-announced firm performance are significant in explaining voluntary forecasting. Taken together, the findings reveal that mandatory forecasts for all firms, in aggregate, provide more and earlier information to investors.

Keywords: forecasts of earnings announcement dates, mandatory forecasting, private information precision, voluntary disclosure, informational tradeoffs

JEL Classification: D84, G14, M48

Suggested Citation

Barth, Mary E. and Clinch, Greg and Ma, Paul, Information in Mandatory and Voluntary Earnings Announcement Date Forecasts (April 20, 2020). Stanford University Graduate School of Business Research Paper No. 18-20. Available at SSRN: https://ssrn.com/abstract=3166906 or http://dx.doi.org/10.2139/ssrn.3166906

Mary E. Barth

Stanford University - Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States
650-723-9040 (Phone)
650-725-0468 (Fax)

Greg Clinch

Independent ( email )

Australia

Paul Ma (Contact Author)

University of Minnesota ( email )

19th Avenue South
Minneapolis, MN 55455
United States

HOME PAGE: http://www.paulma.org

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
170
Abstract Views
1,615
rank
188,807
PlumX Metrics