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Stock performance subsequent to combinations in quarterly revenue surprise, earnings surprise, guidance, valuation, and report time

Author

Listed:
  • Jose I. Alvarado

    (Sam Houston State University)

  • Lindsay C. Clark

    (Sam Houston State University)

  • Jose A. Gutierrez

    (Sam Houston State University)

Abstract

Finance literature highlights various reasons for stock performance subsequent to earnings announcements. However, other moving parts in these scenarios must also be simultaneously specified. While both revenue and earnings surprises are important for determining stock performance, forward-looking guidance and firm valuation prior to earnings should also be considered. Additionally, analyses that solely consider market-level data miss important subtleties evident in a sector-specific study, as “normal” growth and valuation metrics across sectors widely differ. We differentiate between firms that announce earnings during the evening hours (after the close) and firms that announce earnings during the morning hours (prior to the open).

Suggested Citation

  • Jose I. Alvarado & Lindsay C. Clark & Jose A. Gutierrez, 2021. "Stock performance subsequent to combinations in quarterly revenue surprise, earnings surprise, guidance, valuation, and report time," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 45(1), pages 95-117, January.
    • Handle: RePEc:spr:jecfin:v:45:y:2021:i:1:d:10.1007_s12197-020-09531-7
    DOI: 10.1007/s12197-020-09531-7
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    References listed on IDEAS

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    More about this item

    Keywords

    Quarterly expectations; Analyst consensus; Guidance; Trading strategy;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation

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