The Predictability of Interim Earnings over Alternative Quarters

This study examines the predictability of earnings per share for the first, second, third and fourth quarterly reporting periods. Forecasts of quarterly earnings per share both by security analysts and time-series models are analyzed. The next section of the paper deals with the question of whether there is a significant difference in the accuracy with which each quarter can be forecasted. The data in this section strongly indicate that such a difference exists. The third section explores explanations for the findings of section 2. These include the relationship between fourthquarter variability and the integral (versus) discrete reporting methods.' Section 4 contains the summary and conclusions.