This study examines how a stock security’s cash flow duration impacts stock price reactions at earnings announcements …. We find that stock price reactions are positively associated with cash flow duration, especially when earnings surprises … earnings announcements. We further show that the greater stock price reaction for firms with longer cash flow duration could be …

We examine why, as a summary statistic, earnings is better than cash flows at explaining contemporaneous returns … despite being a worse predictor of future operating cash flows. Several studies compare the ability of earnings and operating … cash flows. Although past results are mixed, recent studies suggest earnings are a better summary predictor of returns …