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Voluntary Disclosures that help Analysts Forecast Earnings
Orie Barron,
Penn State University
Donal Byard, Baruch College -- CUNY
Yong Yu, University of Texas at Austin
ABSTRACT. This paper examines how voluntary financial disclosures made with earnings announcements impact analysts reliance on private information after processing these disclosures – and the accuracy of their aggregate (mean) earnings forecasts. Of all the voluntary financial disclosures typically released with earnings announcements, we find that analysts rely more on their private information (and less on common information) when earnings announcements include a balance sheet or segment information disclosures. We also find that the mean forecast improves more when earnings announcements include either of these two voluntary disclosures.
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