A Temporal Analysis of Quarterly Earnings Thresholds: Propensities and Valuation Consequences

By Lawrence D. Brown, M. Caylor. 2005

677 citations recorded by the source corpus.

Subfields: Accounting, Finance, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/639d4ef0d1cf52154983f732e3deb0880644bb36

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Citations in the corpus

The Effect of Cash Flow Forecasts on Accrual Quality and Benchmark Beating (2011, background): “Brown and Caylor (2005) find that: 1) the tendency of firms to avoid reporting negative earnings surprises has been increasing over time, and 2) analysts’ earnings expectations now represent the most important threshold firms seek to exceed.”
The perceived credibility of forward-looking performance disclosures (2014, neutral): “Prior literature establishes three important earnings benchmarks for managers: earnings for the 234 V. Athanasakou and K. Hussainey prior period, analyst forecasts and profits (Degeorge et al. 1999, Brown 2001, Brown and Caylor 2005, Graham et al. 2005).”
Investor Trading and the Post Earnings Announcement Drift (2011, neutral): “9 (1992), and Abarbanell and Bushee (1997) find that analysts underestimate the persistence of earnings surprises in revising their earnings forecasts.”
Trading incentives to meet the analyst forecast (2006, background): “While one potential explanation is that these two thresholds do not provide evidence of earnings management (e.g., Durtschi & Easton, 2005), Brown and Caylor (2005) find that investors unambiguously reward (penalize) firms for reporting quarterly earnings meeting (missing) analysts’ estimates more…”
Measuring Qualitative Information in Capital Markets Research: Comparison of Alternative Methodologies to Measure Disclosure Tone (2016, background): “5 Examples of specific contexts in which capital markets researchers focus on smaller samples include subsamples of firms that exceed analysts’ forecasts (identified in Brown and Caylor [2005] as perhaps the most important earnings benchmark), or a subsample of high-litigation-risk firms that have b”
Discretionary Accruals and Earnings Management: An Analysis of Pseudo Earnings Targets (2006, neutral): “This evidence is also consistent with recent studies that conclude that the analysts’ forecast benchmark is the most important benchmark during the sample period (Dechow et al. 2003; Brown and Caylor 2005).”
Analyst Forecast Consistency (2013, background): “The literature suggests that managers derive benefits from beating analyst earnings forecasts, and reward analysts who facilitate this pattern with information (e.g., Brown and Caylor (2005)).”
Audit Quality and the Trade-Off between Accretive Stock Repurchases and Accrual-Based Earnings Management (2012, background): “Firms that consistently meet or beat analysts’ EPS forecasts enjoy higher credibility (Graham et al. 2005) and valuation premiums (Kasznik and McNichols 2002; Brown and Caylor 2005) that persist even if EPS is knowingly managed (Bartov et al. 2002).”