Assessing the relative informativeness and permanence of pro forma earnings and GAAP operating earnings

• 成果类型: Article
• 署名作者: Bhattacharya, N; Black, EL; Christensen, TE; Larson, CR
• 署名单位: Brigham Young University; Utah System of Higher Education; University of Utah; University of Michigan System; University of Michigan
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2003.06.001
• 发表日期: 2003
• 关键词: announcements; MARKET

摘要

This study investigates whether market participants perceive pro forma earnings to be more informative and more persistent than GAAP operating income by analyzing a sample of 1,149 actual pro forma press releases. We find that pro forma announcers report frequent GAAP losses and are mostly concentrated in the service and high-tech industries. Our analyses of short-window abnormal returns and revisions in analysts' one-quarter-ahead earnings forecasts indicate that pro forma earnings are more informative and more permanent than GAAP operating earnings. Our evidence suggests that market participants believe pro forma earnings are more representative of core earnings than GAAP operating income. (C) 2003 Elsevier B.V. All rights reserved.