We examine positive and negative information transfers associated with management earnings and revenue forecasts. Positive information transfers are due to industry commonalities whereas negative information transfers are caused by competitive shifts. We argue that positive and negative intra‐industry information transfers offset each other and lead to an overall finding of no information transfers even though they exist. We also conjecture that the type of information transfers from the same management forecast can be positive or negative based on the characteristics of the information receiver. We hypothesize positive information transfers to nonrival firms and negative information transfers to rivals. Consistent with our prediction, we find negative (positive) information transfers between forecasting firms and nonforecasting rival (nonrival) firms in the same industry. Through analyses using competitors identified by Hoover's and 10‐K reports, we show more general evidence of negative information transfers to rival firms.

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This paper examines the association between (1) cumulative abnormal stock returns around earnings announcements and (2) geographic sales and geographic earnings data from quarterly segment disclosures by U.S. multinational companies under SFAS No. 131. Only those firms that define their operating segments by geographic area or by a combination of products and services and geographic area are required to disclose this information. The sum of the quarterly earnings (sales) from the foreign geographic segments yields our measure of quarterly foreign earnings (sales). We show that change in quarterly foreign earnings is positively associated with the stock market reaction. Further, the stock market reaction to change in quarterly foreign earnings is different from the stock market reaction to change in quarterly domestic earnings. Quarterly changes in foreign and domestic sales have little additional information content in the presence of quarterly changes in foreign and domestic earnings.

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