Do Earnings Announcements Lift All Boats? Evidence from the Pacific to the Atlantic

• In Event: Forum on the Structure of Communication

Abstract

Although Barber et al. (2013) find that stocks earn higher returns during annual earnings announcement months than during non-announcement months, global evidence of a premium for interim earnings announcements is mixed. Using a new sample, however, I document a significant quarterly earnings announcement premium at the daily level in major developed markets across the world. I also explore the impact of such announcements on peer firms. The results demonstrate that a non-announcing firm experiences significantly higher returns when peer firms’ announcement returns are positive, while a non-announcing firm exhibits a significant negative effect when peer firms announcement returns are negative. This evidence is consistent with the intra-industry information transfer in international earnings announcements and underscores the relevance of interim financial reporting to global markets.

Author

• Kelley Bergsma, Ohio University