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Surprise
Kinds of Surprise Selected AbstractsA SUDDEN SURPRISE OF THE SOUL: THE PASSION OF WONDER IN HOBBES AND DESCARTESTHE HEYTHROP JOURNAL, Issue 6 2008MICHAEL FUNK DECKARD Philosophy begins in wonder, according to Plato and Aristotle. However, they did not expand a great deal on what precisely wonder is. Does this fact alone not raise curiosity in us as to why this passion is important? What is its role in our thinking except to end as soon as one begins conceptually delimiting its nature? The thinkers Thomas Hobbes and René Descartes both expanded upon earlier brief articulations of wonder in natural, supernatural and practical ways. By means of an historical and philosophical examination of these two early modern thinkers, this article hopes to begin to answer the question: ,What is wonder?' [source] Screening of Garlic Water Extract for Binding Activity with Cholera Toxin B Pentamer by NMR Spectroscopy , An Old Remedy Giving a New SurpriseEUROPEAN JOURNAL OF ORGANIC CHEMISTRY, Issue 9 2006Matteo Politi Abstract Binding between a component of the crude hot water extract obtained from Allium sativum crushed bulbs (ASw) and cholera toxin B pentamer (CTB) was detected by STD NMR experiments. Bioassay-oriented fractionation allowed the partial identification of a high molecular weight polysaccharide mainly composed of galactose as the bioactive complex against CTB. This work represents the first example of screening of a medicinal plant by NMR against a specific disease, and corroborates traditional medical uses of the species. (© Wiley-VCH Verlag GmbH & Co. KGaA, 69451 Weinheim, Germany, 2006) [source] The Joy and Surprise of TravelNURSING FOR WOMENS HEALTH, Issue 4 2001Barbara Peterson Sinclair MN No abstract is available for this article. [source] Reframing the Obesity Debate: McDonald's Role May Surprise YouTHE JOURNAL OF LAW, MEDICINE & ETHICS, Issue 1 2007Catherine Adams First page of article [source] Accommodating Surprise in Taxonomic Tasks: The Role of ExpertiseCOGNITIVE SCIENCE - A MULTIDISCIPLINARY JOURNAL, Issue 1 2000Eugenio Alberdi This paper reports a psychological study of human categorization that looked at the procedures used by expert scientists when dealing with puzzling items. Five professional botanists were asked to specify a category from a set of positive and negative instances. The target category in the study was defined by a feature that was unusual, hence situations of uncertainty and puzzlement were generated. Subjects were asked to think aloud while solving the tasks, and their verbal reports were analyzed. A number of problem solving strategies were identified, and subsequently integrated in a model of knowledge-guided inductive categorization. Our model proposes that expert knowledge influences the subjects' reasoning in more complex ways than suggested by earlier investigations of scientific reasoning. As in previous studies, domain knowledge influenced our subjects' hypothesis generation and testing; but, additionally, it played a central role when subjects revised their hypotheses. [source] Surprises in a ,Simple' System: 2,4-Diaminobenzenesulfonic AcidHELVETICA CHIMICA ACTA, Issue 9 2003Janice The search for the polymorphic forms of 2,4-diaminobenzenesulfonic acid (DBSA), known to exist since 1880, has revealed a surprisingly rich solid-state system for such a simple molecule. A monohydrate, a dimoiric hydrate, an anhydrate and two polymorphic forms of the hydrochloride of this material have thus far been prepared. Their characterization by microscopic and thermal methods, FT-IR spectroscopy, and single-crystal structure determination are described. [source] Surprises from the crystal structure of the hepatitis C virus NS2-3 protease,HEPATOLOGY, Issue 6 2006Jerome Gouttenoire Ph.D. Hepatitis C virus is a major global health problem affecting an estimated 170 million people worldwide. Chronic infection is common and can lead to cirrhosis and liver cancer. There is no vaccine available and current therapies have met with limited success. The viral RNA genome encodes a polyprotein that includes 2 proteases essential for virus replication. The NS2-3 protease mediates a single cleavage at the NS2/NS3 junction, whereas the NS3-4A protease cleaves at 4 downstream sites in the polyprotein. NS3-4A is characterized as a serine protease with a chymotrypsin-like fold, but the enzymatic mechanism of the NS2-3 protease remains unresolved. Here, we report the crystal structure of the catalytic domain of the NS2-3 protease at 2.3 Å resolution. The structure reveals a dimeric cysteine protease with 2 composite active sites. For each active site, the catalytic histidine and glutamate residues are contributed by one monomer, and the nucleophilic cysteine by the other. The carboxy-terminal residues remain coordinated in the 2 active sites, predicting an inactive postcleavage form. Proteolysis through formation of a composite active site occurs in the context of the viral polyprotein expressed in mammalian cells. These features offer unexpected insights into polyprotein processing by hepatitis C virus and new opportunities for antiviral drug design. [source] A Temporal Analysis of Earnings Surprises: Profits versus LossesJOURNAL OF ACCOUNTING RESEARCH, Issue 2 2001Lawrence D. Brown I show that median earnings surprise has shifted rightward from small negative (miss analyst estimates by a small amount) to zero (meet analyst estimates exactly) to small positive (beat analyst estimates by a small amount) during the 16 years, 1984 to 1999. I show that a rightward temporal shift in median surprise from negative to positive describes earnings, but neither profits nor losses. Median profit surprise shifts within the positive quadrant, from zero to one cent per share. Median loss surprise shifts within the negative quadrant from extreme negative (about -33 cents per share) to zero. I show that the median surprise for profits exceeds that for losses in every year. I document significant positive temporal trends in both meet and beat analyst estimates for both profits and losses, but I find a greater frequency of profits that either meet or beat analyst estimates in every year. I find a significant positive temporal trend in positive profits that are "a little bit of good news," and a significant negative temporal trend in managers who report losses that are an "extreme amount of bad news." My results are robust to the four internal validity threats I consider,namely temporal changes in: (1) analyst forecast accuracy, (2) the mix of earnings of one sign preceded by earnings of another sign four quarters ago, (3) the timeliness of the most recent analyst forecast, and (4) the I/B/E/S definition of actual earnings. I find that managers of growth firms are relatively more likely than managers of value firms to report good news profits. I show that when they do report positive profit surprises, managers of growth firms are more likely to report "a little bit of good news" in every year. [source] On the Market Reaction to Revenue and Earnings SurprisesJOURNAL OF BUSINESS FINANCE & ACCOUNTING, Issue 1-2 2009Itay Kama Abstract:, 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. [source] Market Reactions to Warnings of Negative Earnings Surprises: Further EvidenceJOURNAL OF BUSINESS FINANCE & ACCOUNTING, Issue 7-8 2008Weihong Xu Abstract:, This study examines two plausible explanations for Kasznik and Lev's (1995) counterintuitive finding that warning firms are subject to more negative market returns than no-warning firms. Namely, are the more negative market reactions to warning firms due to their poorer future earnings performance or due to investor overreaction? I find that, compared with no-warning firms, warning firms experience more severe one-year-ahead earnings declines and these earnings declines can explain the stronger market returns to warning firms. However, my results do not support an investor overreaction explanation. The tests of subsequent abnormal returns of warning firms over various windows do not detect stock return reversals due to correction for overreaction. In addition, the greater revisions in analysts' forecasts for warning firms are found to enhance analyst accuracy rather than increase analyst pessimism. Collectively, my results suggest that the more negative market reactions to warning firms reflect investors' rational anticipation of more severe declines in future earnings for warning firms rather than investor overreaction. [source] Young People, Crime and School Exclusion: A Case of Some SurprisesTHE HOWARD JOURNAL OF CRIMINAL JUSTICE, Issue 1 2005Philip Hodgson Coinciding with this rise was a resurgence of the debate centring on lawless and delinquent youth. With the publication of Young People and Crime (Graham and Bowling 1995) and Misspent Youth (Audit Commission 1996) the ,common sense assumption' that exclusion from school inexorably promoted crime received wide support, with the school excludee portrayed as another latter day ,folk devil'. This article explores the link between school exclusion and juvenile crime, and offers some key findings from a research study undertaken with 56 young people who had experience of being excluded from school. Self-report interview questions reveal that whilst 40 of the young people had offended, 90% (36) reported that the onset of their offending commenced prior to their first exclusion. Moreover, 50 (89.2% of the total number of young people in the sample), stated that they were no more likely to offend subsequent to being excluded and 31 (55.4%) stated that they were less likely to offend during their exclusion period. Often, this was because on being excluded, they were ,grounded' by their parents. [source] Mechanistic Surprises in the Gold(I)-Catalyzed Intramolecular Hydroarylation of Allenes,ANGEWANDTE CHEMIE, Issue 31 2009Dieter Weber Zwei machen die Show: Mechanistische Studien über die Cyclisierung von allenischen Arenen zeigen, dass die Ruheform des Katalysators ein zweikerniges verbrücktes Vinylsystem ist. Dieses wurde isoliert, und seine Reaktivität wurde untersucht. [source] The Effect of Regulation Fair Disclosure on Conference Calls: The Case of Earnings Surprises,ASIA-PACIFIC JOURNAL OF FINANCIAL STUDIES, Issue 6 2009Bok Baik Abstract While conference calls have been widely used as a communication tool between firms and investors, little research has examined the effect of this voluntary disclosure metric on analyst forecasts. In this paper, we examine whether firms use conference calls to guide down analysts' earnings forecasts, thereby avoiding negative earnings surprises before and after Regulation FD. Our findings show that firms hosting conference calls are more likely to guide analysts' forecasts downward and, as a result, they tend to successfully avoid negative earnings surprises in the pre Reg FD period. However, we do not find such relations in the post Reg FD period. We also find that the market reacts positively to firms hosting conference calls only in the post Reg FD period, consistent with the view that the market rewards a reduction in managers' opportunistic guidance to meet the analysts' earnings estimate. [source] Surprises and revelations in biochemistry: 1950,2000,BIOCHEMISTRY AND MOLECULAR BIOLOGY EDUCATION, Issue 3 2002Perry A. Frey First page of article [source] ChemInform Abstract: Structural Similarity and Its Surprises: Endothelin Receptor Antagonists , Process Research and Development Report.CHEMINFORM, Issue 23 2001R. Jansen Abstract ChemInform is a weekly Abstracting Service, delivering concise information at a glance that was extracted from about 100 leading journals. To access a ChemInform Abstract of an article which was published elsewhere, please select a "Full Text" option. The original article is trackable via the "References" option. [source] Market Response to Earnings Surprises Conditional on Reasons for an Auditor Change,CONTEMPORARY ACCOUNTING RESEARCH, Issue 2 2002Karl E. Hackenbrack Abstract Our interest in this study is the relative informativeness of earnings announcements reported before and after Form 8-K disclosures of the reason for an auditor change. We appeal to several models that predict that the market's response to an earnings surprise is positively related to the perceived precision of the earnings report. We predict that the Form 8-K reason disclosures aid investors in updating their expectations of earnings precision by providing useful information about the financial reporting process that produces the earnings report. For 802 auditor changes from late 1991 through late 1997, the average price response per unit of earnings surprise is lower subsequent to an auditor change for companies that switched for disagreement-related or fee-related reasons and higher for those that switched for service-related reasons. This paper provides further evidence on the effects of differential earnings quality on differences in the returns-earnings relation across companies and over time as well as the efficacy of Form 8-K disclosures of reasons for auditor changes. [source] THE USE OF CONTRACT BY GOVERNMENT AND ITS AGENTSECONOMIC AFFAIRS, Issue 1 2009Martin Ricketts Given that the provision of a service is being controlled by the state, the decision whether to contract out that service provision to the private sector is essentially a business decision. A number of economic advantages and disadvantages need to be offset against each other. Governments are poorly placed to make such decisions and it is no surprise that PPPs are often inefficient and steered by political objectives. [source] Treatment non-negotiables: why we need them and how to make them workEUROPEAN EATING DISORDERS REVIEW, Issue 4 2006Josie Geller Abstract In this paper, we define mandatory treatment components as ,treatment non-negotiables' and suggest that the manner in which non-negotiables are set and implemented has a significant impact on therapeutic alliance and outcome in the eating disorders. Common non-negotiable difficulties are reviewed and a philosophy is provided that can be applied to all stages of treatment: non-negotiables need to have a sound rationale, be consistently implemented, not take the client by surprise, and maximize client autonomy. We do not believe that a given non-negotiable is ,right' or ,wrong', but rather that treatment non-negotiables are optimally developed in response to the client population, treatment setting, clinician values and beliefs about change, and client and clinician input and experience. Copyright © 2006 John Wiley & Sons, Ltd and Eating Disorders Association. [source] Copper(I)-Assembled Pseudorotaxanes Bearing Bis(nitrile) Ligands: Selective Formation of Large Chelate RingsEUROPEAN JOURNAL OF INORGANIC CHEMISTRY, Issue 3 2004Efstathia G. Sakellariou Abstract The syntheses of two novel CuI -bis(benzonitrile) complexes of the type [Cu(dCNn)2][PF6] {where dCNn = NCPhO(CH2)nOPhCN, n = 3, 4} are described. Both compounds have been characterized by X-ray crystallography. To our surprise, and although the two complexes were quite similar, two very distinct structures were obtained. For the [Cu(dCN4)2][PF6] complex, a tetrahedral geometry was observed whereas for [Cu(dCN3)2][PF6], a polymeric assembly was formed. A further extension of this work involved the syntheses of two threaded species bearing the M30 macrocycle, Cu metal and a dCNn ligand. The formation of the desired complexes was confirmed by means of mass spectrometry as well as 1-D and 2-D 1H NMR spectroscopy. Finally, the cyclic voltammograms of all 4 new species were recorded giving rise to redox potentials ranging from +0.88 to +1.25 V. These new threaded complexes are of particular interest since they can form the basis of novel rotaxane structures. (© Wiley-VCH Verlag GmbH & Co. KGaA, 69451 Weinheim, Germany, 2004) [source] Mycobacterium tuberculosis Thymidine Monophosphate Kinase Inhibitors: Biological Evaluation and Conformational Analysis of 2,- and 3,-Modified Thymidine AnaloguesEUROPEAN JOURNAL OF ORGANIC CHEMISTRY, Issue 15 2003Philippe Van Rompaey Abstract Mycobacterium tuberculosis thymidine monophosphate kinase (TMPKmt) has recently been introduced as a potential target for the structure-based design of anti-tuberculosis drugs. Based on the TMPKmt X-ray structure and previous S.A.R. studies, we synthesised the nucleoside analogues 3a,b, 6a,b, 7a,b, and 8a,b, modified in 2,- and 3,-position of the ribofuranose ring moiety. To our surprise, these analogues showed only moderate binding affinity (i.e. Ki between 118 and 1260 ,M). This prompted us to investigate the conformational features of these nucleosides. We concluded that compounds of this series, especially 8a,b, are strongly biased towards the "Northern" furanose ring conformation, whereas X-ray crystallography reveals a preference of TMPKmt for the opposite "Southern" conformers. This paper covers the synthesis, biological evaluation and conformational features (i.e. preferred ring puckering) of the 2,- and 3,-modified dT analogues. (© Wiley-VCH Verlag GmbH & Co. KGaA, 69451 Weinheim, Germany, 2003) [source] Talking about others: Emotionality and the dissemination of social informationEUROPEAN JOURNAL OF SOCIAL PSYCHOLOGY, Issue 2 2009Kim Peters There is evidence that we may be more likely to share stories about other people to the extent that they arouse emotion. If so, this emotional social talk may have important social consequences, providing the basis for many of our social beliefs and mobilising people to engage or disengage with the targets of the talk. Across three studies, we tested the situated communicability of emotional social information by examining if the ability of emotionality to increase communicability would depend on the emotion that was aroused and the identity of the audience. Study 1 showed that participants were more willing to share social anecdotes that aroused interest, surprise, disgust and happiness with an unspecified audience. Study 2 provided a behavioural replication of these findings. Study 3 showed that the communicability of emotional social talk did vary with audience identity (friend or stranger). Together, these findings suggest that emotional social events (particularly those that arouse disgust and happiness) are likely to become part of a society's social beliefs, with important consequences for the structure of social relationships. Copyright © 2008 John Wiley & Sons, Ltd. [source] Reforming Europe's Common Foreign and Security PolicyEUROPEAN LAW JOURNAL, Issue 1 2004Daniel Thym To the great surprise of many observers the much lamented absence of a common European response to the war in Iraq did not prevent the Convention from agreeing upon an ambitious reform package in the foreign-policy field. This article explores the legal implications of the new institutional balance for European foreign policy envisaged by the Convention against the background of the achievements and deficiencies of Europe's existing foreign policy regime. Thereby, we shall see in how far the Convention has met the original goal set by the Laeken European Council to consider reform steps to strengthen the Union's ability to ,shoulder its responsibilities in the governance of globalisation.'1 [source] Salt-inducible kinase-1 represses cAMP response element-binding protein activity both in the nucleus and in the cytoplasmFEBS JOURNAL, Issue 21 2004Yoshiko Katoh Salt-inducible kinase-1 (SIK1) is phosphorylated at Ser577 by protein kinase A in adrenocorticotropic hormone-stimulated Y1 cells, and the phospho-SIK1 translocates from the nucleus to the cytoplasm. The phospho-SIK1 is dephosphorylated in the cytoplasm and re-enters the nucleus several hours later. By using green-fluorescent protein-tagged SIK1 fragments, we found that a peptide region (586,612) was responsible for the nuclear localization of SIK1. The region was named the ,RK-rich region' because of its Arg- and Lys-rich nature. SIK1s mutated in the RK-rich region were localized mainly in the cytoplasm. Because SIK1 represses cAMP-response element (CRE)-mediated transcription of steroidogenic genes, the mutants were examined for their effect on transcription. To our surprise, the cytoplasmic mutants strongly repressed the CRE-binding protein (CREB) activity, the extent of repression being similar to that of SIK1(S577A), a mutant localized exclusively in the nucleus. Several chimeras were constructed from SIK1 and from its isoform SIK2, which was localized mainly in the cytoplasm, and they were examined for intracellular localization as well as CREB-repression activity. A SIK1-derived chimera, where the RK-rich region had been replaced with the corresponding region of SIK2, was found in the cytoplasm, its CREB-modulating activity being similar to that of wild-type SIK1. On the other hand, a SIK2-derived chimera with the RK-rich region of SIK1 was localized in both the nucleus and the cytoplasm, and had a CREB-repressing activity similar to that of the wild-type SIK2. Green fluorescent protein-fused transducer of regulated CREB activity 2 (TORC2), a CREB-specific co-activator, was localized in the cytoplasm and nucleus of Y1 cells, and, after treatment with adrenocorticotropic hormone, cytoplasmic TORC2 entered the nucleus, activating CREB. The SIK1 mutants, having a strong CRE-repressing activity, completely inhibited the adrenocorticotropic hormone-induced nuclear entry of green fluorescent protein-fused TORC2. This suggests that SIK1 may regulate the intracellular movement of TORC2, and as a result modulates the CREB-dependent transcription activity. Together, these results indicate that the RK-rich region of SIK1 is important for determining the nuclear localization and attenuating CREB-repressing activity, but the degree of the nuclear localization of SIK1 itself does not necessarily reflect the degree of SIK1-mediated CREB repression. [source] Bolt from the Blue or Avoidable Failure?FOREIGN POLICY ANALYSIS, Issue 3 2005Revisiting September 1, the Origins of Strategic Surprise Drawing on the strategic surprise, warning-response, and foreign policy literature, this article argues that the September 11 terror attacks should be regarded as a strategic surprise and examines a number of key factors that contributed to vulnerability and inhibited vigilance. Three broad explanatory "cuts" derived from the literature,psychological, bureau-organizational, and agenda-political,are deployed to sift through the rapidly expanding empirical record in an effort to shed light on the processes and contextual factors that left the United States vulnerable to the attacks. The article aims to improve our understanding of generic processes and practices that enhance or detract from vulnerability and vigilance. [source] "You will only see it, if you understand it" or occupational risk prevention from a management perspectiveHUMAN FACTORS AND ERGONOMICS IN MANUFACTURING & SERVICE INDUSTRIES, Issue 4 2008Paul Swuste Evidence of a managerial influence on occupational risk prevention is largely lacking. The incidence of major accidents in high-hazard sectors of industry does not show a downward trend. Also, the decline of fatal occupational accidents in industrialized Western countries may well be attributed to the growing employment in the relatively safe service sectors and to a phenomenon known as export of hazards. Looking more closely at accidents and disasters, we now believe they are not only caused by direct physical events, nor by human errors alone. They have their roots in organizational settings and in the sociotechnical system companies are active in. Whatever their cause, we know that (major) accidents almost always take us by surprise. Despite all our efforts and systems, we seem unable to foresee or predict these events. It seems our management systems are looking at the wrong items. Critics from small- and medium-sized enterprises also point in that direction; management systems are too bureaucratic and lack a focus on hazard and risk identification. Apparently, we fail to incorporate the main ingredients of accident causation in our management systems. This article will discuss current models and presentations. In reference to the title of this article, the possibility to integrate these presentations into management systems will be discussed. This article is based on the presentation given at the 4th International Conference on Occupational Risk Prevention, Sevilla, Spain, May 10,12, 2006. © 2008 Wiley Periodicals, Inc. [source] ATM mutations on distinct SNP and STR haplotypes in ataxia-telangiectasia patients of differing ethnicities reveal ancestral founder effects,HUMAN MUTATION, Issue 1 2003Catarina Campbell Abstract Due to the large size (150 kb) of the ataxia-telangiectasia mutated (ATM) gene and the existence of over 400 mutations, identifying mutations in patients with ataxia-telangiectasia (A-T) is labor intensive. We compared the SNP and STR haplotypes of A-T patients from varying ethnicities who were carrying common ATM mutations. We used SSCP to determine SNP haplotypes. To our surprise, all of the most common ATM mutations in our large multiethnic cohort were associated with specific SNP haplotypes, whereas the STR haplotypes varied, suggesting that ATM mutations predated STR haplotypes but not SNP haplotypes. We conclude that these frequently observed ATM mutations are not hot spots, but have occurred only once and spread with time to different ethnic populations. More generally, a combination of SNP and STR haplotyping could be used as a screening strategy for identifying mutations in other large genes by first determining the ancestral SNP and STR haplotypes in order to identify specific founder mutations. We estimate this approach will identify approximately 30% of mutations in A-T patients across all ethnic groups. Hum Mutat 21:80,85, 2002. © 2002 Wiley-Liss, Inc. [source] The Effect of Maternal Depressed Mood on Infant Emotional Reaction in a Surprise-Eliciting SituationINFANT MENTAL HEALTH JOURNAL, Issue 2 2006Nadja Reissland The purpose of this study is to examine the claim that an infant's ability to respond appropriately to an emotional situation varies according to the emotional state of the mother. Surprise expressions in mother and child were examined both in terms of paralinguistic aspects of surprise vocalizations as well as facial expressions. Seventy-two infants and their mothers (mean age=8 months, range=5,11 months) were video- and audiotaped in their homes. Half of the infants, matched for age and gender, had mothers who reported depressed mood. Infants of mothers with depressed mood showed significantly fewer components of facial expressions of surprise compared with infants of nondepressed mothers. Mothers with depressed mood exclaimed surprise with a significantly lower pitch (mean F0=386.13 Hz) compared to nondepressed mothers (mean F0=438.10 Hz). Furthermore, mothers with depressed mood showed fewer associations between elements of emotional expression than the nondepressed group. Infants' expressions of surprise are influenced by maternal mood, resulting in reduced expression of the emotion in infants of mothers with depressed mood. These results are discussed in terms of coordination of vocal parameters in mother,infant dyadic interaction. [source] The Extreme Future Stock Returns Following I/B/E/S Earnings SurprisesJOURNAL OF ACCOUNTING RESEARCH, Issue 5 2006JEFFREY T. DOYLE ABSTRACT We investigate the stock returns subsequent to quarterly earnings surprises, where the benchmark for an earnings surprise is the consensus analyst forecast. By defining the surprise relative to an analyst forecast rather than a time-series model of expected earnings, we document returns subsequent to earnings announcements that are much larger, persist for much longer, and are more heavily concentrated in the long portion of the hedge portfolio than shown in previous studies. We show that our results hold after controlling for risk and previously documented anomalies, and are positive for every quarter between 1988 and 2000. Finally, we explore the financial results and information environment of firms with extreme earnings surprises and find that they tend to be "neglected" stocks with relatively high book-to-market ratios, low analyst coverage, and high analyst forecast dispersion. In the three subsequent years, firms with extreme positive earnings surprises tend to have persistent earnings surprises in the same direction, strong growth in cash flows and earnings, and large increases in analyst coverage, relative to firms with extreme negative earnings surprises. We also show that the returns to the earnings surprise strategy are highest in the quartile of firms where transaction costs are highest and institutional investor interest is lowest, consistent with the idea that market inefficiencies are more prevalent when frictions make it difficult for large, sophisticated investors to exploit the inefficiencies. [source] Earnings Surprise "Materiality" as Measured by Stock ReturnsJOURNAL OF ACCOUNTING RESEARCH, Issue 5 2002William Kinney Ranked earnings surprise portfolios formed from First Call files for 1992,97 are used to assess the annual earnings surprise magnitude for an individual firm sufficient to expect a "significant market reaction." We find that, for an individual firm, the maximum probability of a gain from trading on prior knowledge of any surprise magnitude is .622. The lack of probable trading gains is due to the S,shaped surprise/return relation and the large variance of returns for a given magnitude of surprise. In turn, we find that the S,shape is related empirically to the dispersion of analyst forecasts. Thus, factors underlying dispersion differences are related to the importance or "materiality" of earnings surprise as measured by stock returns and explain at least part of the S,shaped surprise/return relation. [source] A Temporal Analysis of Earnings Surprises: Profits versus LossesJOURNAL OF ACCOUNTING RESEARCH, Issue 2 2001Lawrence D. Brown I show that median earnings surprise has shifted rightward from small negative (miss analyst estimates by a small amount) to zero (meet analyst estimates exactly) to small positive (beat analyst estimates by a small amount) during the 16 years, 1984 to 1999. I show that a rightward temporal shift in median surprise from negative to positive describes earnings, but neither profits nor losses. Median profit surprise shifts within the positive quadrant, from zero to one cent per share. Median loss surprise shifts within the negative quadrant from extreme negative (about -33 cents per share) to zero. I show that the median surprise for profits exceeds that for losses in every year. I document significant positive temporal trends in both meet and beat analyst estimates for both profits and losses, but I find a greater frequency of profits that either meet or beat analyst estimates in every year. I find a significant positive temporal trend in positive profits that are "a little bit of good news," and a significant negative temporal trend in managers who report losses that are an "extreme amount of bad news." My results are robust to the four internal validity threats I consider,namely temporal changes in: (1) analyst forecast accuracy, (2) the mix of earnings of one sign preceded by earnings of another sign four quarters ago, (3) the timeliness of the most recent analyst forecast, and (4) the I/B/E/S definition of actual earnings. I find that managers of growth firms are relatively more likely than managers of value firms to report good news profits. I show that when they do report positive profit surprises, managers of growth firms are more likely to report "a little bit of good news" in every year. [source] | ||||||||||||||||||||||||||||||||||||||||||||||||||||