Are Future Earnings Related to Past Earnings Performance and Dividend Changes?

2011 ◽  
Author(s):  
Ebenezer Asem ◽  
Aditya Kaul
Keyword(s):  
Future Earnings ◽  
Earnings Performance

Stock Splits: Tests of the Earnings Signaling and Attention Directing Hypotheses Using Analyst Forecasts and Revisions

1994 ◽  
Vol 9 (3) ◽  
pp. 411-422 ◽  
Author(s):  
David T. Doran
Keyword(s):  
Earnings Forecasts ◽  
Analyst Forecasts ◽  
Analyst Forecast ◽  
Specific Level ◽  
Future Earnings ◽  
Earnings Information ◽  
Stock Split ◽  
Forecast Revision ◽  
Earnings Performance ◽  
Signaling Hypothesis

The major findings of this study are: (1) earnings performance of splitting firms is favorable relative to preevent longterm analyst (Value Line) forecasts; (2) analysts significantly revise earnings forecasts upward in response to stock split announcements; and (3) in the case of stock split announcing firms, there is a high correlation between future earnings performance and analyst forecast revision. These findings indicate that stock split announcements convey “permanent” earnings information to the market, and security analysts scrutinize the earnings signal at the firm specific level. The results support both the earnings signaling hypothesis and the attention directing hypothesis concerning stock split events.

Insiders’ Foreknowledge of Earnings Results and Rule 10b5-1 Sales Trades

2020 ◽  
pp. 0148558X2096464
Author(s):  
Yen-Jung Lee
Keyword(s):  
Earnings Management ◽  
Strong Evidence ◽  
Private Information ◽  
Unintended Consequence ◽  
Future Earnings ◽  
Earnings Information ◽  
Trade Performance ◽  
Before And After ◽  
Earnings Performance ◽  
Good Trade

This article investigates the source of 10b5-1 plan insiders’ superior trade performance. Specifically, this article examines whether insiders trade on their private information about the firm’s future earnings performance through 10b5-1 sell trades and the features of 10b5-1 plan trades that are exploited to achieve superior trade performance. I find strong evidence that insiders use 10b5-1 plans to sell stock before disappointing earnings results. However, there is no evidence of earnings management around 10b5-1 sales, consistent with insiders’ good trade timing deriving from their foreknowledge about unfavorable earnings news rather than their ability to influence the timing and recognition of earnings performance. Restricting the sample to insiders who trade both before and after the implementation of Rule 10b5-1, I find that these insiders traded aggressively on earnings information even in the pre-10b5-1 era, but then shifted aggressive trading into 10b5-1 plans after the availability of planned trading, implying an unintended consequence of Rule 10b5-1. Finally, I document that strategic 10b5-1 trades tend to be infrequent, irregularly timed, close to the plan initiation date, and executed during traditional earnings blackout periods, revealing problematic features within 10b5-1 plans.

scholarly journals Investor Beliefs Revision In The Multiple Benchmark Accounting Information

SENTRALISASI ◽  
2020 ◽  
Vol 9 (2) ◽  
pp. 68
Author(s):  
Riza Praditha ◽  
Abdul Hamid Habbe ◽  
Robert Jao
Keyword(s):  
Laboratory Experiments ◽  
Accounting Information ◽  
Doctoral Program ◽  
Future Earnings ◽  
Additional Information ◽  
Significant Difference ◽  
Management Guidance ◽  
Before And After ◽  
Earnings Performance ◽  
Full Factorial

Penelitian ini bertujuan untuk menguji efektivitas dari pengungkapan informasi akuntansi multiple benchmark terhadap revisi keyakinan investor dalam memprediksi kinerja laba masa depan. Desain penelitian yang digunakan adalah eksperimen laboratorium 2x2 full factorial within subject. Subjek yang digunakan dalam penelitian ini adalah 20 orang mahasiswa Program Doktor Ilmu Ekonomi Universitas Hasanuddin yang diproksikan sebagai investor. Hasil penelitian menunjukkan bahwa ketika investor memeroleh informasi laba transitory bernilai positif investor cenderung melakukan revisi atas prediksi laba yang dilakukan berdasarkan informasi tambahan (management guidance). Hal tersebut ditunjukkan adanya perbedaan yang signifikan antara prediksi laba sebelum dan setelah diberikan informasi tambahan. Sedangkan, ketika investor memeroleh informasi laba transitory bernilai negatif, menunjukkan hasil yang sebaliknya. Investor cenderung memprediksi kinerja laba masa depan tidak jauh berbeda dari keyakinan awalnya. Hal ini menunjukkan adanya keterpatokan terhadap nilai awal yang menyebabkan investor mengalami bias heuristik anchoring-adjustment.This study aims to examine the effectiveness of the disclosure of multiple benchmark accounting information on the investor's belief revision in predicting future earnings performance. The research design used laboratory experiments 2x2 full factorial within-subject. The subjects used in this study were 20 students of the Doctoral Program in Economics, Hasanuddin University who were proxied as investors. The results show that when investors obtain information on temporary earnings is positive, investors tend to revise earning predictions based on additional information (management guidance). This is indicated by the significant difference between earnings predictions before and after additional information is provided. Meanwhile, when investors get information about negative temporary earnings, the results show the opposite. Investors tend to predict future earnings performance that is not much different from their initial beliefs. This shows the existence of a set of initial values that cause investors to experience anchoring-adjustment heuristic bias.

Corporate Social Responsibility, Tax Avoidance, and Earnings Performance

2015 ◽  
Vol 37 (2) ◽  
pp. 1-21 ◽  
Author(s):  
Luke Watson
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Tax Avoidance ◽  
Resource Theory ◽  
Future Earnings ◽  
Scarce Resources ◽  
Earnings Performance ◽  
Corporate Social ◽  
Slack Resource

ABSTRACT I investigate the influence of pretax earnings performance on the relation between corporate social responsibility (CSR) and tax avoidance. Prior studies of the relation between CSR and tax avoidance find mixed results. Based on slack resource theory (Penrose 1959), I predict and find that the relation between CSR and tax avoidance is moderated by earnings performance. The evidence shows that a lack of social responsibility is positively associated with tax avoidance in firms with low current or future earnings performance, but this effect is diminished when current or future earnings performance is high. There is some evidence that corporate social responsibility is positively associated with tax avoidance when current or future earnings performance is low but, again, the effect disappears when current or future earnings performance is high. Overall, my results suggest that attention to the demands of non-shareholder stakeholders is curtailed when firms face scarce resources.

Sign in / Sign up

Export Citation Format

Share Document