We would like to thank finance seminar participants at Brigham Young University, the University of Missouri, and the 2010 Financial Management conference for their valuable comments.
THE INFORMATION CONTENT OF MANAGEMENT EARNINGS FORECASTS: AN ANALYSIS OF HARD VERSUS SOFT INFORMATION
Article first published online: 17 JUN 2013
© 2013 The Southern Finance Association and the Southwestern Finance Association
Journal of Financial Research
Volume 36, Issue 2, pages 147–174, Summer 2013
How to Cite
Brockman, P. and Cicon, J. (2013), THE INFORMATION CONTENT OF MANAGEMENT EARNINGS FORECASTS: AN ANALYSIS OF HARD VERSUS SOFT INFORMATION. Journal of Financial Research, 36: 147–174. doi: 10.1111/j.1475-6803.2013.12006.x
- Issue published online: 17 JUN 2013
- Article first published online: 17 JUN 2013
We examine the announcement effects of hard (quantitative) and soft (qualitative) information contained in management earnings forecasts. Consistent with previous studies, we confirm a positive relation between the earnings surprise component of the announcement and the magnitude of the abnormal return. In contrast to previous studies, we examine the effect of soft information on abnormal returns while controlling for hard information. Our results show that soft information generally explains more of the announcement effect of earnings forecasts than does hard information. Overall, our findings contribute to the growing literature that examines the economic significance of qualitative information.