At one point or another, most of us have clients who want to avoid scrutiny of sub-par results and consider the “Friday earnings release” approach. Legend has it that everyone will be too busy with their weekend to pay any attention to Friday news.
Sadly, a WSJ article confirms that the opposite is true: because fewer companies release earnings on Fridays, there tends to be more attention – and market volatility – for those who do. The most popular days for earnings are Tuesdays, Wednesdays & Thursdays – typically three or four weeks into earnings season. And here’s what the article says happens on those days:
Attention paid to companies’ earnings—measured by metrics such as downloads of regulatory filings, Google searches and news articles—drops on popular reporting days, said Ed deHaan, an associate professor of accounting at the University of Washington’s Foster School of Business. Mr. deHaan and his colleagues analyzed the timing and impact of 120,000 results announcements in 2015 and found that trading volumes of individual stocks also went down on busy earnings days. Their findings were published in the Journal of Accounting and Economics.
The article also points out that companies may miss out on attention if they hold their earnings call at the same time as industry competitors. It spotlights Citrix, whose earnings date typically conflicts with Microsoft’s – Citrix is now considering moving its earnings date based on unsolicited feedback from analysts & investors. A move might be worth some thought if you’re not getting the attendance you want…
-Liz Dunshee, TheCorporateCounsel.net January 22, 2020
