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Textual fundamentals in earnings press releases

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  • Li, Ken

Abstract

I re-examine the information content of earnings press releases (EPRs) by distinguishing textual fundamentals (TF), which captures information content in non-tone language, from tone, which captures optimism and pessimism and is the focus of prior research. I find after controlling for standard firm characteristics, TF positively predicts future operating performance, unlike tone, which negatively predicts future operating performance. I document a return continuation in TF, in contrast to the return reversal in tone documented in prior literature. My findings distinguish informative content in TF and misleading content in tone in EPRs.

Suggested Citation

  • Li, Ken, 2022. "Textual fundamentals in earnings press releases," Advances in accounting, Elsevier, vol. 57(C).
    • Handle: RePEc:eee:advacc:v:57:y:2022:i:c:s0882611022000104
    DOI: 10.1016/j.adiac.2022.100591
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    More about this item

    Keywords

    Textual analysis; Earnings announcements; Tone; Textual fundamentals; Earnings press releases; Neural network;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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