Investors React Strongly to Companies' Revised Earnings in SEC Filings
The study found that when companies report different earnings in official filings compared to preliminary announcements, the stock market reacts. Investors pay more attention to downward revisions than upward ones. After the official filing, stock prices tend to go up for companies that reported better earnings than expected. Analysts update their forecasts based on preliminary announcements but not on new information in official filings.