Analysts' Treatment of Nonrecurring Items in Street Earnings

By Z. Gu, Ting Chen. 2004

275 citations recorded by the source corpus.

Subfields: Accounting, Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/76d599cb100ab1475951c01342dcfdbba6c908f0

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Citations in the corpus

Sec Scrutiny and the Evolution of Non-Gaap Reporting (2008, unknown): “Second, Gu and Chen (2004) show that analysts begin with the press release figure and re-insert the most permanent expenses to core earnings.”
The Financial Analyst Forecasting Literature: A Taxonomy with Suggestions for Further Research (2008, background): “Following Gu and Chen (2004), we also expect to see more research evaluating the degree to which differences between actual earnings, as reported in forecast databases (e.g., I/B/E/S), and the GAAP-based earnings reported in financial statements reflect truly non-recurring items.”
Who Uses Financial Reports and for What Purpose? Evidence from Capital Providers (2014, unknown): “, 2006; Mechelli and Cimini, 2014) and analysts find ‘pro-forma’ earnings useful because they exclude transient items (Gu and Chen, 2004).”
Non-GAAP earnings and board independence (2011, methodology): “Consistent with prior research, non-GAAP exclusions are less persistent than non-GAAP earnings (1.32 < 1.69), but they are not entirely transitory (Doyle et al., 2003; Gu and Chen, 2004).”
Internal Control and Management Guidance (2009, methodology): “13 It is possible that the definition of earnings used to form the management guidance differs from the definition used to form ‘‘actual’’ earnings within First Call, as analysts often adjust actual earnings to include or exclude specific charges (see Gu and Chen, 2004).”
Earnings management or forecast guidance to meet analyst expectations? (2009, unknown): “This is because analyst tracking services adjust realised earnings by making exclusions for non-recurring items on what Gu and Chen (2004) refer to as a ‘case by case’ basis instead of the category by category basis that Datastream follows.”
Why do pro forma and Street earnings not reflect changes in GAAP? Evidence from SFAS 123R (2012, unknown): “3.2) finds that items excluded from Street earnings have less predictive ability for firm fundamentals than either GAAP earnings or earnings components that are excluded from pro forma earnings but included in Street earnings (Gu and Chen 2004).”
The Disclosure of Non-GAAP Earnings Information in the Presence of Transitory Gains (2014, unknown): “For example, Gu and Chen (2004) document variation in how analysts treat transitory items.”
The Effect of Annual Report Readability on Analyst Following and the Properties of Their Earnings Forecasts (2011, unknown): “This suggested under-reaction may provide additional motivation for analyst coverage since prior work has found that analysts help improve market efficiency (Gu and Chen 2004, Barron et al. 2002, Brown and Sivakumar 2003).”
Do Managers Define Non-GAAP Earnings to Meet or Beat Analyst Forecasts? (2013, methodology): “As Gu and Chen (2004) point out, the existence of many exclusions are known before the earnings announcement (e.”
SEC interventions and the frequency and usefulness of non-GAAP financial measures (2006, background): “Gu and Chen (2004) examine the rationale underlying analysts’ selective inclusion and exclusion of nonrecurring items in street earnings.”
Managing Earnings Using Classification Shifting: Evidence from Quarterly Special Items (2010, background): “Sloan 2002; Bhattacharya et al. 2004; Gu and Chen 2004 ).”