The Determinants and Information Effects of Earnings Announcement Date Variability

Sanghyuk Byun, Kristin C. Roland and Dongchang Kang ()
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Sanghyuk Byun: Sogang Business School, Sogang University, Seoul 04107, Republic of Korea
Kristin C. Roland: Belk College of Business, The University of North Carolina at Charlotte, Charlotte, NC 28223, USA
Dongchang Kang: Sogang Business School, Sogang University, Seoul 04107, Republic of Korea

JRFM, 2024, vol. 17, issue 10, 1-19

Abstract: Prior research finds mixed evidence that firms strategically manage their earnings announcement timing to either highlight or obscure financial information. While most prior studies focus on the specific timing and the nature of individual earnings announcements, we instead focus on the variability of firms’ annual earnings announcement dates (hereafter referred to as EADs) over a span of time. Using archival data collected from I/B/E/S and Compustat, we find that firms with fewer resources, weaker internal monitoring systems, and greater financial uncertainty are much more likely to exhibit increased EAD variability. Furthermore, we provide substantial evidence that the capital market’s response to earnings is noticeably weaker when a firm’s EAD variability is higher. Additional in-depth analysis reveals that firms exhibiting higher EAD variability tend to report significantly lower future performance in both the short- and long-term horizons. Consequently, while managers might intentionally alter an earnings announcement date to exploit variations in investor attention, this comprehensive study provides significant evidence that they should also consider how the market perceives and interprets the overall EAD variability. This understanding is crucial to improve strategic financial communication and maintain investor trust.

Keywords: earnings announcement dates; earnings announcement timing; financial uncertainty; monitoring; voluntary disclosure (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2024
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