This paper examines whether a corporate disclosure practice is a reason for the forecast dispersion anomaly -- the negative relation between analyst forecast dispersion and future stock returns. Prior studies have shown that firms tend to disclose good news in a timely manner and delay the...

This paper unveils the rationality behind the widely criticized practice of consensus-beating, where companies try to report quarterly earnings equal to or slightly exceeding analysts expectations. In a simple theoretical model we show that a high-growth company can use active earnings guidance...