A Growing Wedge in Decision Usefulness: The Rise of Concurrent Earnings Announcements

We show that the conventional disclosure practice of ‘stand-alone’ earnings announcements which pre-empt 10-K filings is steadily disappearing over time. Instead, firms are increasingly holding ‘concurrent’ earnings announcements under which the earnings announcement and the filing of the 10-K occurs on the same day. Importantly for investors, we find that concurrent earnings announcements are less timely and less decision useful than stand-alone earnings announcements. Specifically, we document that relative to stand-alone announcements, concurrent announcements are associated with attenuated market reactions to, and greater anticipation of, earnings news by investors. Finally, we find that firms with greater impediments to producing timely earnings information are more likely to have switched from stand-alone to concurrent announcements. Collectively, we document a distinct divide in the marketplace, with a growing number of firms switching to the less decision useful practice of concurrent earnings announcements.