Earnings Conference Calls and Stock Returns: The Incremental Informativeness of Textual Tone

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CFA Digest
May 2012 | Vol. 42 | No. 2 | 3 pages
Source: CFA Institute
S. McKay Price James S. Doran David R. Peterson Barbara A. Bliss
Natalie Schoon, CFA (Reviewer)

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Abstract

Corporate disclosures are increasingly being announced via quarterly earnings conference calls. In addition to factual information, language and tone play an important role in predicting abnormal returns and trading volume. Earnings surprises over the 60 days following the call can be attributed largely to the tone of the call, particularly for firms that do not pay dividends.

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Topics
Behavioral Finance
    :
  • Institutional Investor Decision Making
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Equity Investments
    :
  • Fundamental Analysis (Sector, Industry, Company) and the Valuation of Individual Equity Securities
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Corporate Finance
    :
  • Corporate Governance
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