المؤلفون: Bratten, Brian¹ (AUTHOR), Larocque, Stephannie² (AUTHOR) larocque.1@nd.edu, Yohn, Teri³ (AUTHOR)

المصدر: Contemporary Accounting Research. Jun2024, Vol. 41 Issue 2, p809-841. 33p.

مصطلحات موضوعية: *STOCK price forecasting, *RATE of return on stocks, *FINANCIAL market reaction, *INVESTORS, *FINANCIAL statements, *EARNINGS forecasting

الملخص (بالإنجليزية): Exclusions from street earnings can include both expected exclusions, forecasted ex ante by analysts, and unexpected exclusions, revealed after earnings are reported. While prior research largely examines total exclusions from street earnings, unexpected exclusions reflect the news or surprise in exclusions. We investigate the properties and informativeness of unexpected exclusions for future profitability, benchmark beating, analyst forecast errors, and future stock returns. We find that unexpected exclusions represent a mix of transitory and recurring items and are informative about future street earnings. In an analysis of hand‐collected analysts' reports, we find that unexpected exclusions are more likely to reflect misestimated recurring items when analysts forecasted exclusions, and unexpected transitory items when analysts did not forecast exclusions. We also examine benchmark‐beating behavior, in which street earnings meet street forecasts but GAAP earnings miss GAAP forecasts. We observe that benchmark beating is more likely to occur when analysts forecast exclusions than when they do not. Moreover, we find unexpected exclusions are more persistent when street earnings meet street forecasts but GAAP earnings miss GAAP forecasts. These findings are consistent with recurring earnings amounts being opportunistically shifted to excluded items to meet analysts' street forecasts. Finally, we find some evidence that analysts and investors react to, but do not fully incorporate, the information in unexpected exclusions, based on forecast revisions and stock price reactions. [ABSTRACT FROM AUTHOR]

Abstract (French): Résumé: De la valeur informative des exclusions inattendues des estimations des bénéfices Les exclusions des estimations des bénéfices peuvent comprendre les exclusions attendues, prévues ex ante par les analystes, et les exclusions inattendues, révélées après la communication des bénéfices. Alors que la recherche antérieure porte en grande partie sur les exclusions totales des estimations des bénéfices, les exclusions inattendues reflètent le caractère nouveau ou étonnant des exclusions. Nous nous penchons sur les propriétés et la valeur informative des exclusions inattendues concernant la rentabilité future, le dépassement des indices de référence, les erreurs prévisionnelles des analystes et le rendement futur des actions. Nous établissons que les exclusions inattendues représentent une combinaison d'éléments transitoires et récurrents, et fournissent de l'information sur les estimations des bénéfices à venir. Dans le cadre d'une analyse de rapports d'analystes recueillis à la main, nous montrons que les exclusions inattendues sont plus susceptibles de refléter les éléments récurrents mal estimés lorsque les exclusions ont été prévues par les analystes et les éléments transitoires inattendus lorsque les exclusions n'ont pas été prévues par les analystes. Nous examinons également les comportements associés au dépassement des indices de référence, où les estimations des bénéfices correspondent aux prévisions des analystes, mais où les bénéfices conformes aux PCGR ne correspondent pas aux prévisions conformes aux PCGR. Nous observons que le dépassement des indices de référence est plus susceptible de survenir lorsque les analystes prévoient les exclusions que lorsqu'ils ne le font pas. En outre, nous établissons que les exclusions inattendues sont plus persistantes lorsque les estimations des bénéfices correspondent aux prévisions des analystes, mais que les bénéfices conformes aux PCGR ne correspondent pas aux prévisions conformes aux PCGR. Ces résultats sont cohérents avec le transfert opportuniste des montants des bénéfices récurrents vers les éléments exclus afin de correspondre aux prévisions des analystes. Enfin, nous dégageons des données probantes indiquant que les analystes et les investisseurs réagissent à l'information sur les exclusions inattendues, sans toutefois l'intégrer pleinement, en fonction des révisions apportées aux prévisions et de la réaction des cours boursiers. [ABSTRACT FROM AUTHOR]

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المؤلفون: Bratten, Brian¹ brian.bratten@uky.edu, Larocque, Stephannie² larocque.1@nd.edu, Yohn, Teri Lombardi³ tyohn@emory.edu

المصدر: Management Science. Aug2023, Vol. 69 Issue 8, p4790-4809. 20p.

مصطلحات موضوعية: *EARNINGS forecasting, *RATE of return on stocks, *EARNINGS announcements, *BUSINESS schools, *MANAGERIAL economics, *FORECASTING

مستخلص: Analysts' street earnings forecasts are sometimes based on GAAP earnings and sometimes based on non-GAAP earnings, which exclude various GAAP earnings components. Therefore, differences in analysts' street earnings forecasts may capture differences in not only expected performance but also the earnings metric forecasted. We argue that analysts who forecast non-GAAP, rather than GAAP, street earnings are more likely to separately analyze earnings components. Consistent with this argument, we find that analysts who forecast non-GAAP street earnings issue relatively more accurate forecasts. We also argue that excluded earnings components often reflect negative transitory items, and that variation across analysts in the earnings metric forecasted suggests that the negative excluded items are forecasted by only a subset of analysts. Consistent with this assertion, we find that variation across analysts in the earnings metric forecasted is associated with a lower consensus GAAP earnings surprise and lower stock returns around the earnings announcement. Finally, although variation in the earnings metric forecasted is a source of analyst forecast dispersion, we find that it is also incrementally associated with a lower earnings response coefficient, consistent with the existence of transitory items. We therefore find that the variation in the earnings metric forecasted is an important source of analyst forecast dispersion that predicts not only a lower earnings surprise but also a lower earnings response. This paper was accepted by Brian Bushee, accounting. Funding: Financial support from the Gatton College of Business & Economics, the KPMG Fellowship at the Mendoza College of Business, and the Goizueta Business School is gratefully acknowledged. Supplemental Material: The data files are available at https://doi.org/10.1287/mnsc.2022.4553Test. [ABSTRACT FROM AUTHOR]

: Copyright of Management Science is the property of INFORMS: Institute for Operations Research and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)