The Impact of Concurrent Conference Calls on the Information Content of Earnings Announcements

Abstract

We investigate the association of concurrent conference calls with the previously documented over-time increase in information content of earnings announcements. Conference calls are typically held on the same day as an earnings announcement and provide a source of competing information. We expect the increase in the information content of earnings announcements is actually a byproduct of either growth in number or increase in information content of concurrent conference calls. We find that the combination of additional information provided by conference calls and the increased conference call activity during the sample period is the source of the previously documented increase in information content of earnings. After controlling for conference calls, we find that the information content of earnings has, at best, remained constant during the period from 1995 to 2000 and for smaller quintile firms has actually decreased.