Bundled Earnings Guidance and Analysts' Forecast Revisions*

• 成果类型: Article
• 署名作者: Hsu, Charles; Wang, Rencheng
• 署名单位: Hong Kong University of Science & Technology; Singapore Management University
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/1911-3846.12686
• 发表日期: 2021
• 页码: 3146-3181
• 关键词: information-content; career concerns; management; MARKET; disclosure; accuracy; returns; IMPACT; news; BIAS

摘要

Bundling managerial earnings guidance with quarterly earnings announcements (EAs) has become an increasingly common practice. This study investigates the impact of bundled guidance on analysts' forecast revisions. Our findings indicate that analysts respond more to bundled guidance than non-bundled guidance. This effect increases with analysts' time pressure and cognitive constraints around the EA. Analysts' revisions also incorporate more of the bundled management guidance when accompanied by additional information, such as conference calls. We further find that analysts revise their forecasts more quickly following bundled guidance than non-bundled guidance. Together, these findings are consistent with the notion that analysts place more weight on bundled guidance than on non-bundled guidance in their forecast revisions as bundled guidance facilities analysts' timely forecast revisions following EAs. Finally, we find that analysts' forecast revisions following bundled guidance generate significant market reactions. Our findings enhance our understanding of analysts' information processing and shed light on why bundling can be an effective guidance strategy.