Investor Trading Responses to Differing Characteristics of Voluntarily Disclosed Earnings Forecasts

Investigating investor reactions to current, voluntarily disclosed executive forecasts is a means of assessing potential investor interest in internal estimates of corporate earnings. In this study of executive earnings forecasts that were voluntarily disclosed during 1963-68, almost one-half of the...

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Bibliographic Details
Published in:The Accounting review 1979-04, Vol.54 (2), p.376
Main Authors: Nichols, Donald R, Tsay, Jeffrey J, Larkin, Paula D
Format: Article
Language:English
Subjects:
Disclosure
Earnings
Earnings forecasting
Forecasting
Impacts
Information
Securities trading
Studies
Online Access:Get full text
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Summary:Investigating investor reactions to current, voluntarily disclosed executive forecasts is a means of assessing potential investor interest in internal estimates of corporate earnings. In this study of executive earnings forecasts that were voluntarily disclosed during 1963-68, almost one-half of the forecasts were accompanied by quarterly earnings reports in the same announcement. The information content of shorter term and longer term forecasts was virtually the same. There was some evidence that predictions of relatively large changes in earnings, greater than 40%, were associated with large changes in trading activity. The duration of the forecast period did not appear to have any significant relationship to the amount of the increased trading activity.
ISSN:0001-4826
1558-7967