This paper examines stock market behavior associated with interim earnings and marketing‐production disclosures by NYSE industrial corporations during 1905–10. Mean stock price changes are examined to assess whether these firms were more likely to disclose favorable information. We also examine the magnitude of price changes and trading volume to provide evidence on the credibility of these disclosures as perceived by investors. The sample and time period we examine enable us to evaluate the stock market effects of interim disclosures in a discretionary disclosure environment. We find no evidence that these firms were more likely to selectively disclose favorable interim information based on contemporaneous stock price changes. Also, no significant differences are detected in the incidence of interim disclosure before dividend or annual earnings increases compared to dividend cuts/omissions or annual earnings declines. We also document increased trading volume in the announcement week and prior weeks, but significant price changes are restricted to the preannouncement period. These results are driven by firms that do not frequently disclose interim information, and these firms' disclosures are frequently accompanied by concurrent news items (in particular, new financings). Price and volume results are weakly sensitive to the exclusion of cases with concurrent news items. Collectively, our results suggest no systematic tendency to disclose favorable information and managerial disclosures were at least partially credible in the early 20th century disclosure environment. Résumé. Les auteurs examinent la réaction du marché des valeurs mobilières à la publication d'information périodique relative aux bénéfices ainsi qu'à la production et au marketing, par les sociétés industrielles dont les titres étaient inscrits à la Bourse de New York durant la période 1905–1910 et s'intéressent aux variations du cours moyen des titres, afin d'évaluer si ces sociétés étaient davantage enclines à publier de l'information favorable. Ils examinent également l'ampleur des variations du cours des titres et du volume des opérations afin d'établir comment les investisseurs percevaient la crédibilité de l'information publiée. Les variations du cours des titres observées à l'époque ne permettent pas de conclure que ces sociétés étaient davantage enclines à sélectionner l'information périodique la plus favorable, et les auteurs ne détectent pas non plus de différences significatives dans les conséquences de la publication d'information périodique préalablement à des hausses de dividendes ou de bénéfices annuels, par rapport à des réductions ou des omissions de dividendes ou des diminutions des bénéfices annuels. Dans l'ensemble, les résultats portent à croire qu'il n'y a pas de tendance systématique à la publication d'information favorable, et que l'information publiée par la direction est au moins en partie crédible dans le contexte du début du XX e siècle.

[This article provides evidence on the news content of managements' preliminary earnings estimates, which we define as projections of earnings conveyed in expectational language after the end of the reporting period but before the release of final earnings numbers. We examine stock price changes to assess whether a preponderance of these disclosures are interpreted as "good news" by investors, and the extent to which good news releases are disclosed earlier than bad news. Associated with preliminary earnings estimates are disclosure and timing issues. While previous theoretical work suggests managers have incentives to suppress or delay disclosure of adverse information (Verrecchia 1983; Dye 1985), studies examining the disclosure issue using management forecasts produced inconsistent results, and results on the timing of corporate earnings announcements are ambiguous. Although there is evidence on the information content of preliminary earnings estimates (Foster 1973), no study has used these data in investigating the relation between corporate disclosure and news content. Preliminary estimates are important because they embody aspects of disclosure choice similar to other voluntary disclosures such as forecasts, and the time lags between preliminary estimates and earnings releases are short, thereby assuring a strong timing aspect to their release. We document significant negative mean abnormal returns associated with the disclosure of preliminary estimates. The median is negative, but not significant at conventional levels. Tests on the timing issue indicate an ambiguous relation between disclosure timing and news content. Preliminary estimates of quarters 1-3 earnings are more likely to be bad news compared to estimates of quarter 4 and annual earnings, but within quarters there is no strong relation between news content and disclosure timing.]