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| Author: | Chen, S. Matsumoto, D. Rajgopal, S. |
| Title: | Is silence golden? An empirical analysis of firms that stop giving quarterly earnings guidance |
| Journal: | Journal of Accounting & Economics
2011 : FEB, VOL. 51: 1-2, p. 134-150 |
| Index terms: | earnings disclosure empirical research companies investors |
| Freeterms: | determinants consequences stoppage guidance |
| Language: | eng |
| Abstract: | The article investigates firms that stop providing earnings guidance ("stoppers") either by publicly announcing their decision ("announcers") or doing so quietly ("quiet stoppers"). Based on firms that continue guiding, stoppers have poorer prior performance, more uncertain operating environments, and fewer informed investors. It is argues announcers commit to non-disclosure because they 1) do not expect to report future good news. 2) have lower incentives to guide due to the presence of long-term investors. The three-day return around the announcement is negative. Stoppers subsequently experience increases in analyst forecast dispersion and decreases in forecast accuracy but no change in return volatility or analyst following. |
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