| Summary: | 碩士 === 淡江大學 === 會計學系碩士班 === 93 === Previous research on corporates’ earnings announcement mainly focused on the factors that affect the corporates’ preannouncement earnings. How corporates’ earnings preannouncement reflects on stock prices and the relation between earnings preannouncement and investors’ judgment are rarely touched. This thesis aims to analyze corporates’ earnings preannouncements’ impact on stock prices and investors’ judgment.
This thesis consists of two parts: In part 1, Database analysis is adopted in analyzing Taiwan’s public companies from 2001~2003 as the analyzing subjects. This part meant to discuss how corporates’ earnings preannouncements impact on stock prices by using regression analysis. In part 2, a survey is applied to gain information and Two-Way ANOVA Analysis is used to analyze the influence of corporates’ earnings pre-announcements on investors’ judgment. The research can be concluded as follows:
Analysis of corporates’ preannouncements’ impact on stock prices
1. In the discussion of disclosure strategy, the research shows that public companies tends to fully reveal positive information or insufficiently reveal negative information when public companies make their preannouncement disclosure.
2. As for information content, when companies have positive total news, PANEWS is a significant signal to the stock market. No matter the results of companies’ total news is positive or negative, EANEWS is a significant signal to the stock market. This indicates that investors’ investment policy depends on EANEWS’ moving direction. Investors buy stocks with positive EANEWS and sell those with negative EANEWS. Therefore, stock prices change consistently with EANEWS. It shows that investors are rational in their investment.
3. In the analysis of investors’ expectation on actual earnings on the preannouncement day, when companies have positive total news, investors have no expectation on the actual earnings on the preannouncement day. Therefore, the excess amount of EANEWS over PANEWS won’t fully reflect on the stock price. When companies have negative total news, investors expect with the opposite direction to the actual situation. That leads to the situation that arbitrage don’t exist on the preannouncement day.
4. In discussing whether stock market reacts greater on the official announcement day than on the preannouncement day, despite the fact that negative EANEWS has significantly greater influence on CAR than positive EANEWS do, stock market doesn’t create less return in reaction to the unexpected negative information announced on the official announcement day. These results show that the stock market reacts greater on the preannouncement day than on the official announcement day. It promotes the forming of the companies’ administration’s optimistic disclosure strategy which is to fully send out positive information and withhold negative information on the preannouncement day.
In Taiwan, public companies are regulated to announce their annual report or the first seasonal report before April of the coming year. The companies’ administration tends to announce the favorable earnings figures in order to sends out the signal of companies’ lucrative future to make up for the negative information from the past year. This action creates investors’ optimistic expectation on companies’ prospect. The conclusions of the thesis can explain the above phenomenon.
Analysis of corporate’s preannouncements’ impact on investors’ judgment
1. In analyzing investors’ reaction to corporates’ preannouncements, the research shows that under the condition of companies with positive total news, there are no significant differences between investors’ estimation about future earnings and companies’ different preannouncement strategy. If companies are with negative total news, investors’ estimation on companies’ future earnings would vary with the preannouncement-day news-revealing ratio. The results show that the group of over-reacting (150%) has higher investors’ estimated future earnings than the group of insufficient-reacting (50%); the group of complete-reacting (100%) has higher investors’ estimated future earnings than the group of insufficient-reacting (50%), which matches the hypothesis of this thesis. However, the group of complete-reacting (100%) has higher investors’ estimated future earnings than the group of over-reacting (150%), which is the opposite of the thesis hypothesis. The above results indicate that Taiwan’s professional investors do not systematically react to companies’ different preannouncement strategy.
2. As for the influence of analysts’ earnings estimation on investors’ judgment, the research indicates that if companies’ earnings reach or exceed analysts’ estimation(this group of companies is called the group with positive total news) ,investors have more optimistic judgment on them than those whose earnings are lower than analysts’ estimation(this group of companies is called the group with negative total news )
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