Hiding or Helping? Determinants and Consequences of the Timing of Earnings Conference Calls

• In Event: Doctoral Student-Faculty Interchange: Financial Reporting I

Abstract

Open conference calls are an important information source because of their forward-looking discussion, interactive nature, and easy accessibility. Unlike earnings announcements that almost always occur after trading hours, earnings conference calls vary greatly in timing. Using Bloomberg data, we investigate why firms time earnings calls differently and how the stock market interprets and reacts to firms’ timing choices. We document that firms with more complex and bad earnings news, as measured by absolute earnings surprise and negative earnings surprise, tend to hold calls outside trading hours, especially after the market closes. We find that earnings conference calls in the evening are associated with more negative returns and higher trading volume, after controlling for bad earnings news. We propose that evening conference calls convey bad news beyond the earnings surprise and find that they contain more negative guidance surprises. Altogether, the findings suggest that managers strategically time their earnings conference calls.

Authors

• Sudipta Basu, Temple University

• Zhongnan Xiang, Temple University