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Forecasting Earnings Forecasts

Author

Listed:
  • Bert de Bruijn

    (Erasmus University Rotterdam)

  • Philip Hans Franses

    (Erasmus University Rotterdam)

Abstract

We analyze earnings forecasts retrieved from the I/B/E/S database concerning 596 firms for the sample 1995 to 2011, with a specific focus on whether these earnings forecasts can be predicted from available data. Our main result is that earnings forecasts can be predicted quite accurately using publicly available information. Second, we show that earnings forecasts that are less predictable are also less accurate. We also show that earnings forecasters who quote forecasts that are too extreme need to correct these as the earnings announcement approaches. Finally, we show that the unpredictable component of earnings forecasts can contain information which we can use to improve the forecasts.

Suggested Citation

  • Bert de Bruijn & Philip Hans Franses, 2013. "Forecasting Earnings Forecasts," Tinbergen Institute Discussion Papers 13-121/III, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20130121
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Earnings Forecasts; Earnings Announcements; Financial Markets; Financial Analysts.;
    All these keywords.

    JEL classification:

    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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