Stock repurchases as an earnings management device

• 成果类型: Article
• 署名作者: Hribar, P; Jenkins, NT; Johnson, WB
• 署名单位: Cornell University; Washington University (WUSTL); University of Iowa
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2005.10.002
• 发表日期: 2006
• 关键词: eps

摘要

We investigate whether firms use stock repurchases to meet or beat analysts' earnings per share (EPS) forecasts. We identify conditions under which repurchases increase EPS and document the frequency of accretive repurchases from 1988 to 2001. We find a disproportionately large number of accretive stock repurchases among firms that would have missed analysts' forecasts without the repurchase. The repurchase-induced component of earnings surprises appears to be discounted by the market, and this discount is larger when the repurchase seems motivated by EPS management, although using the repurchase to avoid missing analyst forecasts appears to mitigate some of the negative stock price response. (c) 2006 Elsevier B.V. All rights reserved.