Managers' Use of Pessimistic Tone Across Alternative Disclosure Outlets: Earnings Press Releases Versus MD&A

2008 ◽  
Author(s):  
Angela K. Davis ◽  
Isho Tama-Sweet
Keyword(s):  
Press Releases ◽  
Earnings Press Releases

scholarly journals The framing and reframing of corporate financial results

2016 ◽  
Vol 21 (1) ◽  
pp. 103-119 ◽  
Author(s):  
Julian Rosenkranz ◽  
Irene Pollach
Keyword(s):  
Press Releases ◽  
Content Type ◽  
Financial News ◽  
Financial Communication ◽  
News Agencies ◽  
Corporate Earnings ◽  
Positive Statements ◽  
Earnings Releases ◽  
Earnings Press Releases

Purpose – News agencies are important stakeholders for large organizations, since the news they distribute will be adopted by other news outlets, which influence public opinion and hence corporate reputation. The purpose of this paper is to advance the understanding of how corporate earnings press releases are transformed into financial news by investigating whether the frames introduced by companies are adopted or reframed by news agencies. Design/methodology/approach – A content analysis of framing techniques in corporate earnings releases and their corresponding news-agency releases was performed, focussing on the financial figures and benchmarks presented, performance attributions, and the tonality of the texts. Findings – The findings suggest that news agencies reframe earnings releases at the textual-pragmatic level by reducing their length, using fewer financial figures, and changing the position of these figures in the texts; they increase transparency by avoiding adjusted financial figures, qualifying figures, and adding analyst assessments; and they change the tonality by down-toning positive statements and highlighting negative aspects. Originality/value – This paper makes a contribution to the field of corporate financial communication, which has not shed much light on the transformation of earnings press releases into financial news. In addition, this paper contributes to the stream of research on journalistic transformations of corporate press releases in general, which has ignored the influential role of news agencies as both manufacturers and wholesalers of news.

Managers set the tone: Equity incentives and the tone of earnings press releases

2016 ◽  
Vol 72 ◽  
pp. S132-S147 ◽  
Author(s):  
Özgür Arslan-Ayaydin ◽  
Kris Boudt ◽  
James Thewissen
Keyword(s):  
Press Releases ◽  
Equity Incentives ◽  
Earnings Press Releases

Are Seemingly Self-Serving Attributions in Earnings Press Releases Plausible? Empirical Evidence

2013 ◽  
Vol 89 (2) ◽  
pp. 635-667 ◽  
Author(s):  
Michael D. Kimbrough ◽  
Isabel Yanyan Wang
Keyword(s):  
Attribution Theory ◽  
Poor Performance ◽  
Data Availability ◽  
Bad News ◽  
Specific Information ◽  
Press Releases ◽  
Cross Sectional ◽  
External Causes ◽  
Earnings Press Releases ◽  
Industry Peers

ABSTRACT Seemingly self-serving attributions either attribute favorable performance to internal causes (enhancing attributions) or poor performance to external causes (defensive attributions). Managers presumably provide such attributions in earnings press releases to heighten (dampen) investors' perceptions of the persistence of good (bad) earnings news, thereby increasing (decreasing) the market reward (penalty) for good (bad) earnings news. Building on attribution theory and prior research on earnings commonality, this study investigates cross-sectional differences in investors' responses to quarterly earnings press releases that contain seemingly self-serving attributions. Using a random sample of press releases from 1999 to 2005, we find that firms that provide defensive attributions to explain earnings disappointments experience less severe market penalties when: (1) more of the their industry peers also release bad news, and (2) their earnings share higher commonality with industry- and market-level earnings. On the other hand, firms that provide enhancing attributions to explain good earnings news reap greater market rewards when: (1) more of their industry peers release bad news, and (2) their earnings share lower commonality with industry- and market-level earnings. Collectively, our results demonstrate that investors neither ignore seemingly self-serving attributions nor accept them at face value, but rely on industry- and firm-specific information to assess their plausibility. Data Availability: Data are publicly available from the sources identified in the text.

Are family firms more optimistic than non-family firms?

2019 ◽  
Vol 32 (3) ◽  
pp. 399-416 ◽  
Author(s):  
Xuan Huang ◽  
Fei Kang
Keyword(s):  
Family Firms ◽  
Earnings Announcements ◽  
Family Ownership ◽  
Press Releases ◽  
Firm Level ◽  
Content Type ◽  
Alternative Measures ◽  
Disclosure Tone ◽  
The Impact ◽  
Earnings Press Releases

Purpose The purpose of this study is to investigate how family ownership affects the disclosure tone of firm earnings press releases. Design/methodology/approach Following prior literature, this study defines family firms as those in which members of the founding families continue to hold positions in top management, to sit on the board or to be blockholders. The disclosure tone of earnings press releases is measured by the level of optimism in firms’ earnings announcements using Loughran and McDonald’s (2011) word classifications. Multivariate analysis is performed to examine the impact of family ownership on firms’ disclosure tone. Additional analysis includes controlling for different firm-level characteristics and using alternative measures of disclosure tone. Findings This study documents that the disclosure tone of earnings announcements is more optimistic for family firms than for non-family firms. The result implies that family owners’ large undiversified equity position in their business results in strong incentives for them to issue more positive earnings announcements to maintain high stock performance. Further analysis reveals that the results are mainly driven by family firms with founder CEOs. The results are robust to controls for corporate governance characteristics and to alternative measures of corporate disclosure tone. Originality/value The findings of this study contribute to the literature that examines factors associated with the determinants of the tone in firms’ earnings announcements. In addition, this study adds to the extant literature on family firms by providing useful insight into the influence of family control on corporate voluntary disclosure.

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