In this paper, Tiago Duarte-Silva and his co-authors show that delays in earnings announcements are associated with decreases in firm value, which are especially sizeable when they are precipitated by accounting reasons or when no reason for the delay is announced. This decrease in firm value is also shown to be proportional to the decline in future earnings. In the paper they discuss implications both for shareholders and corporate decision makers faced with an earnings delay.
Market expectations and security prices
Market participants use the information available to them at any given time to form expectations of the future performance of a company and a company’s stock...