Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5087128 | Journal of Accounting and Economics | 2006 | 25 Pages |
Abstract
This paper examines the relation between revenue surprises and contemporaneous and future stock returns. It also investigates whether analysts update their earnings forecasts in response to revenue surprises in a timely and unbiased fashion. Stock price reaction on the earnings announcement date is significantly related to contemporaneous as well as past revenue surprises. After controlling for earnings surprises, we find significant abnormal returns in the post-announcement period for stocks that have large revenue surprises. Although analysts revise their forecasts of future earnings in response to revenue surprises, they are slow to incorporate fully the information in revenue surprises.
Keywords
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Social Sciences and Humanities
Business, Management and Accounting
Accounting
Authors
Narasimhan Jegadeesh, Joshua Livnat,