Journal Articles

Whisper Forecasts of Quarterly Earnings per Share

1999, Journal of Accounting and Economics

Messod Daniel Beneish, Mark Bannoli, Susan Watts


The purpose of the paper is to compare unofficial forecasts of earnings known as "whispers" to forecasts generated by First Call analysts. Our sample consists of approximately 900 whispers found primarily on message boards on investor web sites between 1995 and 1997. Our analysis yields the following results. First, whispers are, on average, more accurate than First Call forecasts, and they are better proxies for the market's expectation of the forthcoming earnings. Second, while First Call forecasts tend to underestimate earnings, on average, whispers tend to overestimate them Finally, trading strategies based on the relation between whisper and First Call forecasts yield abnormal returns. This suggests that whispers contain information beyond that contained in analysts' forecasts and that the market impounds that information into price before earnings are announced.


Bagnoli, M., Messod D. Beneish, and Susan G. Watts (1999), "Whisper Forecasts of Quarterly Earnings per Share," Journal of Accounting and Economics, Vol. 28, No. 1, pp. 27-50.

Kelley School of Business

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