Earnings surprise

An earnings surprise, or unexpected earnings, in accounting, is the difference between the reported earnings and the expected earnings of an entity.[1] Measures of a firm's expected earnings, in turn, include analysts' forecasts of the firm's profit[2][3] and mathematical models of expected earnings based on the earnings of previous accounting periods.[4][5]

  1. ^ Pinto, Jerald E.; Elaine Henry; Thomas R. Robinson; John D. Stowe (2010). Equity Asset Valuation (2nd ed.). John Wiley & Sons. ISBN 978-0470579657. Retrieved 18 January 2014.
  2. ^ "Earnings Surprise Definition". Investopedia. 2013. Retrieved 12 January 2014.
  3. ^ Defond, Mark L., and Chul W. Park. 2001. “The Reversal of Abnormal Accruals and the Market Valuation of Earnings Surprises.” The Accounting Review 76 (3): 375–404.
  4. ^ Bernard, Victor L.; Jacob K. Thomas (1990). "Evidence that Stock Prices Do Not Fully Reflect the Implications of Current Earnings for Future Earnings". Journal of Accounting and Economics. 13 (4): 305–340. CiteSeerX 10.1.1.335.4043. doi:10.1016/0165-4101(90)90008-r.
  5. ^ Soffer, Leonard C.; Thomas Lys (1999). "Post-Earnings Announcement Drift and the Dissemination of Predictable Information". The Accounting Review. 16 (2): 305–331. doi:10.1111/j.1911-3846.1999.tb00583.x.

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