Strategic Announcement Sequencing: Earnings and M&amp;A Announcements

Hu, Huajing; Platt, Katarzyna; Su, Chih-Huei

doi:10.1080/15427560.2020.1864734

Cited by 4 publications

(2 citation statements)

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“…The early announcement of earnings also depends upon particular events. For example, the possibility of making early earnings announcement increases if firms are expected to make mergers and acquisitions related announcements (Hu et al , 2018). The logical explanation of the early earnings announcements-mergers and acquisitions’ announcements relationship is the idea that the early quarterly earnings announcements will provide positive signals to analysts.…”

Section: Practical Implications and Conclusionmentioning

confidence: 99%

Does earnings surprise determine the timing of the earnings announcement? Evidence from earnings announcements of Indian companies

Prasad

Prabhu²

2020

AJAR

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PurposeThe purpose of this study is to investigate whether the earnings surprise influences decision to make earnings announcements during or after the trading hours is influenced by the earnings surprise resulting from the difference between consensus earnings estimates and the actual reported earnings.Design/methodology/approachEvent study methodology was employed to test the hypotheses relating to earnings surprise and timing of earnings announcements. Twelve quarterly earnings announcements of 30 companies, drawn from BSE SENSEX of India, were studied to test the hypothesized relationships.FindingsThe study has found statistically significant differences in the market responses to the earnings announcements made during and after the trading hours. The market demonstrated a negative response to the earnings announcements made after the trading hours. Further, the results of the logistic regression have shown that the presence of significant earnings surprises is likely to induce firms to make earnings announcements after the trading hours. The results indicate that those firms that intend to reduce the overreaction and underreaction to earnings surprises are likely to make earnings announcements after the trading hours.Originality/valueThis paper highlights the market response to the earnings announcement made during and after the regular trading hour. Further, the paper examines if the earnings surprise influences the decision to announce the results.

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Section: Practical Implications and Conclusionmentioning

confidence: 99%

Does earnings surprise determine the timing of the earnings announcement? Evidence from earnings announcements of Indian companies

Prasad

Prabhu²

2020

AJAR

View full text Add to dashboard Cite

show abstract

“…The stock market's reaction to M&A announcements depends on how investors predict future profitability. If investors judge that the M&A activity will create future cash flows, then the announcement will respond positively [106]. M&A benefits shareholders, including the target company and the bidding company [107], [108].…”

Section: Hypothesis Developmentmentioning

confidence: 99%