What is ‘Earnings Announcement’
Earnings announcement is an official public statement of a company’s profitability for a specific time period, typically a quarter or a year. An earnings announcement is typically made on a specific date during earnings season and is preceded by earnings estimates issued by equity analysts. When the company has been profitable leading up to the announcement, their share price will usually increase after the information is released.
Explaining ‘Earnings Announcement’
Because the earnings announcement is the official statement of a company’s profitability, the days leading up to the announcement are often filled with speculation. Analyst estimates can be notoriously off-the-mark, and can rapidly adjust up or down the days leading up to the announcement. This can attract the attention of investors who take the estimates at face value, artificially inflating the share price on speculative trading.
Further Reading
- Liquidity and the post-earnings-announcement drift – www.tandfonline.com [PDF]
- Market liquidity and volume around earnings announcements – www.sciencedirect.com [PDF]
- Event studies in economics and finance – www.jstor.org [PDF]
- Post-earnings announcement drift in Spain and behavioural finance models – www.tandfonline.com [PDF]
- An informational efficiency perspective on the post-earnings announcement drift – www.sciencedirect.com [PDF]
- Timing the disclosure of information: management's view of earnings announcements – www.jstor.org [PDF]
- Security returns around earnings announcements – www.jstor.org [PDF]
- The Relationship between Uncertainty about Information and Post Earnings Announcement Drift-Evidence from the Experiences of China's Listed Companies [J] – en.cnki.com.cn [PDF]
- Investor Attention, Earnings Announcement Effect and Announcement Timing of Management [J] – en.cnki.com.cn [PDF]
