Do Analyst Earnings Forecasts Allow for Accounting Conservatism?

2003 ◽  
Author(s):  
Jinhan Pae ◽  
Daniel B. Thornton
Keyword(s):  
Earnings Forecasts ◽  
Accounting Conservatism ◽  
Analyst Earnings

The Rewards for Meeting or Beating Managers' Own Earnings Guidance

2020 ◽  
Author(s):  
Kai Wai Hui ◽  
Alfred Z. Liu ◽  
Yao Zhang
Keyword(s):  
Stock Return ◽  
Earnings Forecasts ◽  
Earnings Guidance ◽  
Cross Sectional ◽  
Earnings Expectations ◽  
Future Performance ◽  
Management Guidance ◽  
Prior Literature ◽  
Management Earnings Guidance ◽  
Analyst Earnings

This study documents a stock return premium for meeting or beating management's own earnings guidance (MBMG) that is separate and distinct from the premium for meeting or beating analysts' earnings forecasts (MBAF) documented in prior literature. Cross-sectional analyses reveal that the MBMG premium relative to the MBAF premium increases when management guidance is more informative. We also find that MBMG is incrementally informative about a firm's future performance after considering MBAF. Our findings suggest that investors consider management earnings guidance to be a performance threshold in addition to analyst earnings forecasts when forming earnings expectations.

Market Reaction to Abnormal Inventory Growth: Evidence for Managerial Decision-Making

2021 ◽  
Author(s):  
Kirsten A. Cook ◽  
G. Ryan Huston ◽  
Michael R. Kinney ◽  
Jeffery S. Smith
Keyword(s):  
Earnings Management ◽  
Management Strategy ◽  
Earnings Forecasts ◽  
Manufacturing Firms ◽  
Fixed Costs ◽  
Managerial Decision ◽  
Managerial Decision Making ◽  
Investor Confidence ◽  
Analyst Earnings ◽  
Market Premium

Prior research demonstrates that manufacturing firms increase production (relative to sales) to transfer fixed costs from cost of goods sold (COGS) to inventory accounts, thereby increasing income to reach or surpass earnings thresholds. We examine how the market reacts to this earnings management strategy. We find that investors respond positively to inventory growth based on an expectation of increased future sales; however, this signal is weaker for inventory manipulators. Further, the market premium from meeting or beating analyst earnings forecasts by manipulating inventory is smaller than the premium for achieving this threshold absent inventory manipulation or through accrual manipulation. Finally, we examine firms considered to be “serial” inventory manipulators, finding that the market consistently discounts earnings beats for these firms, suggesting that inventory manipulation erodes investor confidence in firms’ earnings. Collectively, our results provide new insights into a challenge facing operations managers and finance managers in manufacturing firms.

Discussion: “Dispersion in Analysts' Earnings Forecasts as a Measure of Uncertainty”

1998 ◽  
Vol 13 (3) ◽  
pp. 271-274 ◽  
Author(s):  
Lawrence D. Brown
Keyword(s):  
Stock Price ◽  
Annual Report ◽  
Earnings Forecasts ◽  
Analyst Forecast ◽  
Earnings Forecast ◽  
Data Set ◽  
Forecast Dispersion ◽  
Forecast Revision ◽  
Analyst Earnings ◽  
The Impact

This paper tackles an interesting question; namely, whether dispersion in analysts' earnings forecasts reflects uncertainty about firms' future economic performance. It improves on the extant literature in three ways. First, it uses detailed analyst earnings forecast data to estimate analyst forecast dispersion and revision. The contrasting evidence of Morse, Stephan, and Stice (1991) and Brown and Han (1992), who respectively used consensus and detailed analyst data to examine the impact of earnings announcements on forecast dispersion, suggest that detailed data are preferable for determining the data set on which analysts' forecasts are conditioned. Second, it relates forecast dispersion to both analyst earnings forecast revision and stock price reaction to the subsequent earnings announcement. Previous studies related forecast dispersion to either analyst forecast revision (e.g., Stickel 1989) or to subsequent stock price movements (e.g., Daley et al. [1988]), but not to both revision and returns. Third, it includes the interim quarters along with the annual report. In contrast, previous research focused on the annual report, ignoring the interims (Daley et al. [1988]).

Audit committee financial expertise and properties of analyst earnings forecasts

2013 ◽  
Vol 29 (1) ◽  
pp. 1-11 ◽  
Author(s):  
John L. Abernathy ◽  
Don Herrmann ◽  
Tony Kang ◽  
Gopal V. Krishnan
Keyword(s):  
Audit Committee ◽  
Earnings Forecasts ◽  
Financial Expertise ◽  
Analyst Earnings
Sign in / Sign up

Export Citation Format

Share Document