Earnings Variability on Share Price Annualized Volatility among Quoted Non-Financial Companies at Nairobi Securities Exchange

Stephen Maina, Dr. Tabitha Nasieku and Dr. Julius Miroga Bichanga
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Dr. Tabitha Nasieku: Senior Lecturer; Department of Economics, Accounting and Finance; Jomo Kenyatta University of Agriculture and Technology: P.O. Box 62000-00200 Nairobi, Kenya.
Dr. Julius Miroga Bichanga: Department of Economics, Accounting and Finance; Jomo Kenyatta University of Agriculture and Technology: P.O. Box 62000-00200 Nairobi, Kenya.

International Journal of Research and Innovation in Social Science, 2025, vol. 9, issue 5, 3178-3188

Abstract: The study examined the effect of earnings variability on share price annualized volatility among non-financial companies quoted at Nairobi Securities Exchange. Earnings variability is a situation where there is a fluctuating pattern of a company’s net income or earnings per share (EPS) during a given period of time. The study was guided by pragmatic research philosophy and adopted a quantitative research design to evaluate earnings variability and share price annualized volatility among quoted non-financial firms at Nairobi securities exchange. A census study of 39 non -financial companies quoted at the NSE was employed, of which 33 met data requirements. The study used secondary data from audited annual financial reports of the quoted firms for twenty years, from January 2003 through December 2022. The data collected was analysed using descriptive and inferential statistics. The hypothesis that earnings variability had no significant effect on share price annualized volatility among quoted non-financial companies at Nairobi Securities Exchange was tested at a 95% confidence interval using t-statistic and p-value. The study used panel data Ordinary Least Square method technique for research analysis. Panel regression analysis using random effects model was conducted after necessary normality, model specification, homoscedasticity, linearity and autocorrelation diagnostic tests. Findings show that earnings variability had no significant effect (p = 0.843, r² ≈ 0.000) on share price annualized volatility, among quoted non-financial firms at the Nairobi Securities Exchange.

Date: 2025
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