Can’t wait to get home to share some good news? Or maybe you’re skulking somewhere, dreading to drop the bomb about something not so cheery? Then you’re just like companies issuing their earnings reports, finds an MIT Sloan School of Management assistant professor who studied the corporate earnings calendars of 19,000 businesses.
Eric So writes for MarketWatch that when companies reschedule their earnings report dates, they’re unintentionally sending signals to astute investors. He teaches in the economics, finance and accounting area at the Massachusetts Institute of Technology.
“I discovered that firms which moved up their reporting dates were considerably more likely to report higher earnings, while those that delayed their reporting dates tended to announce earnings declines,” he says. “The stock values of the companies tracked closely with the earnings trends.
“Put simply, through their scheduling behavior, companies signal the direction of their earnings. Investors, however, generally fail to react until after the announcements are made.”
So why aren’t most investors picking up the cues? Because the revisions to the corporate earnings report calendars appear like routine adjustments to the timetable.
“A closer look, though, finds that in their reporting schedules, companies are conveying important, albeit seemingly unintended, information, which could be highly advantageous for an astute investor,” So suggests.
Now that the little calendar kitty is out of the bag, it’ll be interesting to see what impact So’s discovery will have on trading.
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