What question did this study set out to answer?

This research aims to evaluate the information content of earnings announcements by analyzing forecast errors from analysts.

Associations Between Forecast Errors and Excess Returns Near to Earnings Announcements.

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This analysis demonstrates the link between forecast errors and earnings announcements, highlighting implications for pricing mechanisms.

This research aims to evaluate the information content of earnings announcements by analyzing forecast errors from analysts.
Used analyst forecast errors near announcement dates to assess unexpected earnings.
Compared forecast errors and changes in earnings as measures of unexpected earnings.
Tested for variations in excess returns around earnings announcements while accounting for forecast errors.
Examined early versus late disclosers in the same industry.
Analyzed forecast ranges as measures of earnings predictability.
Earnings announcements retain information content relative to market expectations right before announcements.
Analyst forecast errors do not consistently predict unexpected earnings better than fourth-quarter earnings changes.
Additional information released simultaneously with earnings significantly affects pricing.
Earnings announcements from early disclosers contain more information than those from late disclosers.
Forecast ranges serve as a reasonable indicator of analyst forecast errors and earnings predictability.

Hughes et al. (1987) studied this question.

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