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The Unspoken Signals in Earnings Releases


A recent study suggests that keeping an eye on the earnings calendar could have a big payoff for investors.

The idea is surprisingly simple. When companies reschedule earnings announcements, investors should look at whether the new date is earlier or later than the original date. The study suggests that companies that delay announcements are more likely to disclose earnings declines and to see their stock prices fall in the days and weeks that follow the disclosure. Conversely, companies that move up their announcements tend to announce better earnings and see their stocks rise.

Dating Game

“Investors are missing out on an opportunity to identify what firms are ultimately going to report,” says Eric So, an assistant professor at MIT’s Sloan School of Management, whose study, “Time Will Tell: Information in the Timing of Scheduled Earnings News,” was published last summer. The study based its findings on some 19,000 earnings-calendar revisions by publicly traded firms over eight years.


Calendar Clues

...For his study, Dr. So analyzed data provided by Wall Street Horizon Inc., which collects calendar data about publicly traded companies for many retail brokerages such as Charles Schwab Corp. , which, in turn, shares that information with its clients.

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