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Benchmark for Earnings Performance: Management Forecasts versus Analysts’ Forecasts


  • Sandip Dhole

    () (ISB, Hyderabad)

  • Sagarika Mishra

    () (Deakin University)

  • K. Sivaramakrishnan



We investigate the incremental information conveyed by management forecast errors over and above the consensus analyst forecast error at the time of earnings announcement. To the extent that analysts rationally revise their forecasts to subsume information contained in management releases, it is reasonable to argue that management forecasts are “dated” and that the revised analysts’ forecasts would constitute the more timely benchmark to evaluate performance. We find that when management forecasts and the subsequent analyst forecasts are different, management forecast errors convey information to the stock market that is not reflected in the consensus analyst forecast errors.

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  • Sandip Dhole & Sagarika Mishra & K. Sivaramakrishnan, "undated". "Benchmark for Earnings Performance: Management Forecasts versus Analysts’ Forecasts," Financial Econometics Series 2012_06, Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance.
  • Handle: RePEc:dkn:ecomet:fe_2012_06

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    More about this item


    Management forecasts; Analysts’ forecasts; Earnings Response Coefficient;

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G29 - Financial Economics - - Financial Institutions and Services - - - Other
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting


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