Information in Mandatory and Voluntary Earnings Announcement Date Forecasts

We investigate whether mandatory earnings announcement date forecasts are informative to investors and the informational tradeoffs between mandatory and voluntary forecasts. We find: (i) The percentages of the quarter’s earnings news conveyed by mandatory China and voluntary US forecasts are similar. (ii) Mandatory China forecasts provide information about yet-to-be-announced firm performance and convey earnings news, even for firms less likely to forecast if forecasting were voluntary and despite making the forecasts at the beginning of the reporting window. The market reacts to information in initial and revised forecasts. (iii) Voluntary US forecasts provide information primarily through the forecasted announcement date; the act of forecasting and forecast timing provide some information, but no significant incremental earnings news is conveyed by the act of forecasting or its timing. However, the majority of US firms do not issue forecasts. Information quality and yet-to-be-announced firm performance are significant in explaining voluntary forecasting. Taken together, the findings reveal that mandatory forecasts for all firms, in aggregate, provide more and earlier information to investors.