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This paper examines the long-term economic performance of firms that utilize real earnings management and habitually meet/closely beat analysts’ forecasts. I show that firms that habitually meet/closely beat analysts’ forecasts and that resort to real activities to manipulate earnings exhibit significant negative effect on firms’ long-term economic performance. In the meantime, my results also show the signaling effects of previous studies of meeting/beating certain benchmarks, and the value-destroying nature of real earnings management.