A Temporal Analysis of Earnings Surprises: Profits Versus Losses

By Lawrence D. Brown. 2001

661 citations recorded by the source corpus.

Subfields: Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/e04c1b9dc196000e7e5c72cca96a5734e91762ee

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In Economics and Econometrics

1. Martin Walker
2. Siew Hong Teoh
3. David F. Larcker
4. Richard M. Frankel
5. David A. Hirshleifer
6. Scott A. Richardson
7. Daniel A. Cohen
8. Douglas J. Skinner

In Finance

1. Martin Walker
2. Eric C. So
3. Sarah E. McVay
4. David A. Hirshleifer
5. Siew Hong Teoh
6. Patricia M. Dechow
7. Vasiliki Athanasakou
8. Shivaram Rajgopal

Citations in the corpus

• The Rewards to Meeting or Beating Earnings Expectations (2002, background): “Our results (not presented here) show that both MBE have become more prevalent in recent years, as documented by previous research (see, for example, Brown, 1997) as well as contemporaneous studies (see Brown, 2001; Lopez and Rees, 2000; Matsumoto, 2001).”
• Can Stock Recommendations Predict Earnings Management and Analysts’ Earnings Forecast Errors? (2003, positive): “1 Matsumoto [1999], Brown [2001], and Burgstahler and Eames [2000] also report unusual frequencies of zero and small positive forecast errors. Each of these studies refers to earnings expectations management as an explanation for this result. Consistent with the argument in this paper, Degeorge, Pat”
• Trading incentives to meet the analyst forecast (2006, background): “We include year-specific indicator variables because the proportion of small positive earnings surprises versus small negative earnings surprises has increased over time (Brown, 2001).”
• Trends in Earnings Management and Informativeness of Earnings Announcements in the Pre- and Post-Sarbanes Oxley Periods (2005, neutral): “to avoid negative earnings surprises has increased significantly over time (Brown, 2001; Bartov et. al, 2002; Matsumoto, 2002), although no significant increase has been observed in the tendency to avoid losses or earnings decreases (Burgstahler and Eames, 2003).”
• Perspectives on Recent Capital Market Research (2002, background): “Much prior research has concluded that analysts' forecasts are optimistic (O'Brien 1988, among others), although there appears to be secular reduction in the optimistic bias (Brown 2001).”
• Managing Earnings Using Classification Shifting: Evidence from Quarterly Special Items (2010, neutral): “Related to these studies, Brown and Pinello (2007) specifically examine whether accruals are managed more in the fourth quarter relative to interim quarters.”
• Do Analysts Practice What They Preach and Should Investors Listen? Effects of Recent Regulations (2009, neutral): “This controls for systematic differences in earnings forecast characteristics as the end of the period nears (Brown 2001; Bradshaw 2004).”
• Analysts’ Forecasts and Asset Pricing: A Survey (2016, background): “…and evidence shows that meeting or beating targets are important managerial objectives (e.g., Burgstahler and Dichev, 1997; Degeorge et al., 1999, Brown 2001; Kasznik and McNichols, 2002; Matsumoto 2002; Bartov et al., 2002).5 Hence, if analysts indeed seek to appease management, we might expect…”
• Investor Psychology in Capital Markets: Evidence and Policy Implications (2001, neutral): “Forecasts are generally optimistic especially at 12-month and longer time horizons, both in the U.S. and other countries (see e.g. Capstaff, Paudyal, and Rees (1998) and Brown (2001)).”
• The Effect of Beating and Missing Analysts' Forecasts on the Information Content of Unexpected Earnings (2002, background): “Kasznik and McNichols (2001) investigate whether firms that meet analysts’ forecasts have a higher market value than firms that m i s s expectations after controlling for the current period’s forecast error. Using annual returns, they find that the reward to meeting or beating expectations is approx”
• Analyst following along the supply chain (2011, neutral): “Prior literature provides mixed evidence on the impact of analyst generaland firm-specific experience on forecast accuracy (Clement 1999; Brown 2001; Clement and Tse 2005; Kini et al. 2009).”
• Intra-year shifts in the earnings distribution and their implications for earnings management (2007, background): “However, Brown and Caylor (2005) find that reporting earnings better than analysts’ forecast is the most important threshold.”