The Information Content of Earnings and Turnover Announcements in France

Annual net income is seen by shareholders as the most important figure, since it is, for individual accounts, the basis of appropriation of profit by the shareholders' general meeting. However, firms publish interim figures at a higher frequency to allow investors to react quickly to frequently updated information that gives them a more accurate view of the evolution of the firm. In the United States, according to regulation S-X, the interim quarterly reports must disclose the net income. In France, firms must publish their quarterly turnovers and their half-year income statements in addition to their annual accounts. Whereas American publications are practically homogeneous in nature in terms of earnings disclosure, the information content of French quarterly reports differs from that of the half-year and annual accounts. Such French irregularities in information content mean that interim and annual announcements do not have the same value for the shareholders. Because of the heterogeneous nature and the time frame of the disclosed information, one may wonder if French market reactions to the announcements of interim publications exhibit significantly different characteristics from those observed for quarterly releases in other countries. This can only be appreciated through a differential analysis of French market response to interim and annual announcements