Do management EPS forecasts allow returns to reflect future earnings? Implications for the continuation of management’s quarterly earnings guidance

Using 18,253 firm-year observations from 1998 through 2003, we build on literature suggesting that more informative disclosures allow returns to better reflect future earnings and test whether management earnings per share forecasts and their characteristics influence the future earnings response coefficient (FERC). We find that FERCs are greater for forecasting firms and when forecasts are more frequent or precise. We suggest that more frequent and more precise forecasts assist investors in better predicting future earnings. Importantly, we find that quarterly and short-term forecasts incrementally increase the association between returns and future earnings beyond annual and long-term forecasts; thus, even short-term, quarterly forecasts allow investors to form better expectations about future earnings. This suggests a benefit of quarterly earnings forecasts possibly overlooked in recommendations from the United States Chamber of Commerce, CFA Institute, Business Roundtable Institute for Corporate Ethics, and The Conference Board to eliminate quarterly earnings guidance.     

Analysts’ accrual-related over-optimism: do analyst characteristics play a role?

Bradshaw et al. (J Acc Res 39:45–74, 2001) find that analyst forecast over-optimism is greater for firms with high accruals. This “accrual-related over-optimism” is generally interpreted as evidence that analyst forecasts do not fully incorporate predictable earnings reversals associated with high accruals. We investigate whether analyst experience, access to resources (brokerage size), and portfolio complexity moderate the relation between over-optimistic forecasts and high accruals. We demonstrate the robustness of accrual-related over-optimism to controls for cash flow and prior forecast errors. We find that accrual-related over-optimism is lower for analysts with greater general experience and for analysts following fewer firms but find only limited evidence of lower accrual-related over-optimism for analysts from larger brokerages and for analysts following fewer industries.     

Short term labour market consequences of teenage pregnancy

Pregnancies by unwed teenagers leading to either a birth or an abortion lead to fewer years of completed education. Less education translates to lower wages and a corresponding decrease in labour supplied to the market. The empirical results for young women who give birth are similar to the findings of other studies. The results for young women who have abortions are original. This research indicates that young women who become pregnant as teenagers have poorer short-term labour market outcomes than other young women who do not become pregnant.     

Consumer Analysis in Ethnic Live Seafood Markets in the Northeast Region of the United States

During September through November of 2006, in-store intercept surveys of consumers who buy live seafood in retail markets in New Jersey, New York, and Pennsylvania revealed that the average live seafood consumer makes 6.2 visits per month, spends $14.80 per visit on live seafood, travels 7.8 miles mainly by car, and is purchasing for 3.7 people in his or her household. Consumers value physical appearance of the product over price, generally have no preference for either “Product of the USA” or imported, and generally have no preference for either wild-caught or farm-raised. Many had no preference whether their fish was alive or dead before leaving the store, but if the fish is to be slaughtered in-store, preferred to have their fish gutted or filleted. Consumers generally prefer to purchase live seafood during the winter months and on either a Friday or Saturday.     

INFORMATION SUPPORT FOR REVERSE LOGISTICS: THE INFLUENCE OF RELATIONSHIP COMMITMENT

The use of reverse logistics systems is becoming more common as firms realize the value that can be reclaimed from returned goods. This study investigates the influence of information systems (IS) support activity on reverse logistics performance, as well as the moderating effects of relationship commitment within reverse logistics arrangements. In a survey of CEOs of U.S. catalog sales electronics companies, information systems support is found to moderately affect two separate performance constructs related to reverse logistics programs. The research also indicates relationship commitment is critical to more fully realizing the value of IS support in reverse logistics arrangements.