On the market reaction to revenue and earnings surprises

Itay Kama*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


This study extends Ertimur et al. (2003) and Jegadeesh and Livnat (2006a) by providing a contextual framework for the information content of revenue and earnings surprises. I find that the influence of earnings surprises (revenue surprises) on stock returns is lower (higher) in R&D intensive companies. Also, market reaction to earnings surprises is lower in the fourth quarter, and to revenue surprises it is higher in industries with oligopolistic competition. A comprehensive analysis indicates that, in contrast to previous studies for the full sample, in several contexts market reaction to earnings surprises is not higher than to revenue surprises.

Original languageEnglish
Pages (from-to)31-50
Number of pages20
JournalJournal of Business Finance and Accounting
Issue number1-2
StatePublished - Jan 2009


  • Contextual analysis
  • Earnings surprises
  • Financial statement analysis
  • Information content
  • Post-earnings announcement drift
  • Revenue surprises


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