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The Timing of Earnings Announcements:
An Examination of the Strategic Disclosure Hypothesis
Jeffrey Doyle,
Utah State University
Matthew Magilke, University Of Utah
ABSTRACT. We examine the conventional wisdom that managers strategically choose to release worse earnings news after the market closes or on Fridays to take advantage of decreased media attention. Using firm-level tests that only examine firms that switch their disclosure timing behavior (the “strategic” reporters), we find no evidence that managers strategically choose to report worse (better) news after the market closes or on Fridays (before the market opens or on Monday-Thursday). We also document that these findings are robust to cross-sectional differences in media and investor coverage. Finally, we explore other determinants for the decision to announce before the market is open versus after the market is closed. We find some evidence that corporate headquarters location, institutional ownership, firm complexity, the size of the firm, the number of analysts covering the firm, and industry membership are all significant explanatory variables.
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