Managers' EPS Forecasts: Nickeling and Diming the Market?

• 成果类型: Article
• 署名作者: Bamber, Linda Smith; Hui, Kai Wai; Yeung, P. Eric
• 署名单位: University System of Georgia; University of Georgia; Hong Kong University of Science & Technology
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr.2010.85.1.63
• 发表日期: 2010
• 页码: 63-95
• 关键词: recent national censuses; EARNINGS FORECASTS; discretionary disclosure; corporate; INFORMATION; ANALYST; determinants; expectations; association; voluntary

摘要

Nearly half of managers' forecasts of annual earnings per share (EPS) end in nickel intervals, whereas only about 20 percent of actual EPS end in nickel intervals. We provide evidence on the attributes, determinants, and consequences of this systematic wedge between managers' predictions and firms' ex post actual performance. Managers' nickel forecasts are not simply a benign response to uncertainty about up-coming earnings, because nickel forecasts are not only less accurate, but also they are more optimistically biased than non-nickel forecasts. In addition to uncertainty, efforts to protect the firm's proprietary information and self-serving opportunism in response to managers' economic incentives also play incremental roles in explaining managers' propensity to issue forecasts heaped at nickel intervals. We also find that managers' nickel forecasts spur even active analysts to issue forecasts heaped at nickel intervals, although analysts' forecast revisions partially adjust for the optimism and noise in managers' nickel forecasts.