Around-the-Clock Media Coverage and the Timing of Earnings Announcements

36 Pages Posted: 30 Jul 2004

See all articles by Mark Bagnoli

Mark Bagnoli

Purdue University

Michael B. Clement

University of Texas at Austin - Department of Accounting

Susan G. Watts

Purdue University

Date Written: December 2005

Abstract

We reexamine the descriptive ability of the conventional wisdom that earnings announcements made after trading and on Friday are dominated by bad news in light of the 24/7 media coverage and other technological changes of the 1990s. We find that the change in media coverage has facilitated a significant change in earnings announcement times: only 27% of earnings announcements are now made during trading as opposed to 67% in prior research. However, our finding of continued dominance of bad news in Friday announcements in particular strongly suggests that the conventional wisdom is not solely the result of managers' desire to take advantage of limited media coverage. Instead, managers appear to be taking advantage of other aspects of investors' behavior, such as their anticipating negative Friday announcements earlier in the week, and the relatively quiet (in terms of trading) weekend period to manage stock price responses to their companies' financial news.

Keywords: Earnings announcements, earnings surprises, analysts' forecasts, strategic timing, bad news, earnings disclosures, market efficiency, earnings response coefficients

JEL Classification: G12, G14, M41, M45

Suggested Citation

Bagnoli, Mark E. and Clement, Michael B. and Watts, Susan G., Around-the-Clock Media Coverage and the Timing of Earnings Announcements (December 2005). McCombs Research Paper Series No. ACC-02-06. Available at SSRN: https://ssrn.com/abstract=570247 or http://dx.doi.org/10.2139/ssrn.570247

Mark E. Bagnoli

Purdue University ( email )

Department of Accounting
West Lafayette, IN 47907-1310
United States
765-494-4484 (Phone)
765-496-1778 (Fax)

Michael B. Clement

University of Texas at Austin - Department of Accounting ( email )

2110 Speedway, Stop B6400
Austin, TX 78712
United States
512-471-0332 (Phone)
512-471-3904 (Fax)

Susan G. Watts (Contact Author)

Purdue University ( email )

Department of Accounting
West Lafayette, IN 47907-1310
United States
765-494-4504 (Phone)
765-496-1778 (Fax)

Register to save articles to
your library

Register

Paper statistics

Downloads
1,170
rank
15,978
Abstract Views
5,965
PlumX Metrics