Managerial Disclosure vs. Analyst Inquiry: An Empirical Investigation of the Presentation and Discussion Portions of Earnings-Related Conference Calls

49 Pages Posted: 12 Nov 2006  

Dawn A. Matsumoto

University of Washington - Department of Accounting

Erik Roelofsen

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM)

Maarten Pronk

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE)

Date Written: November 2006

Abstract

Using a sample of over 10,000 earnings-related conference call transcripts, we examine the determinants of within-firm variation in the length of managers' presentation and analyst discussion periods during earnings-related conference calls. We find that managers' presentations are longer when reporting poor performance and when earnings are a potentially downward-biased signal of future performance. This result contrasts with prior studies that generally find firms disclose more when performance is good, which is likely due to 1) the fact that the choice to host a conference call is a policy choice that is not easily changed and 2) analysts' direct involvement in the call temper managers' incentives to expound on good performance. We also find that analyst discussion periods are longer when market performance is poor, suggesting that the non-earnings related information disclosed in the presentation is insufficient for analysts' information needs. Finally, we find that longer calls are associated with larger price reactions, larger trading volume, larger analyst forecast revisions and improvements in analysts' forecast accuracy - indicating longer calls are more informative to the market.

Keywords: conference calls, voluntary disclosure, financial analysts

JEL Classification: M41, M45, G29, G12

Suggested Citation

Matsumoto, Dawn A. and Roelofsen, Erik and Pronk, Maarten, Managerial Disclosure vs. Analyst Inquiry: An Empirical Investigation of the Presentation and Discussion Portions of Earnings-Related Conference Calls (November 2006). Available at SSRN: https://ssrn.com/abstract=943928 or http://dx.doi.org/10.2139/ssrn.943928

Dawn Matsumoto (Contact Author)

University of Washington - Department of Accounting ( email )

224 Mackenzie Hall, Box 353200
Seattle, WA 98195-3200
United States
206-543-4454 (Phone)
206-685-9392 (Fax)

Erik Roelofsen

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands

Maarten Pronk

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands

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