Analysts' Influence on Managers' Guidance

Analysts ask managers for forward-looking information in one-third of quarterly conference calls; most frequently, seeking earnings per share guidance. In this study, we examine the long-term consequences of analysts' questions on future manager disclosure choices. Using six types of commonly provided guidance, we find that when analysts request new guidance or ask about prior guidance, managers are more likely to provide similar guidance in future quarters. When analysts do not ask about prior guidance, managers are less likely to provide that type of guidance in the future. This effect is long-lasting, spills over into earnings announcements, and is strongest for firms with the most severe information problems. Our results provide evidence that analysts shape managers' disclosure choices in meaningful ways.