The Roles of Data Providers and Analysts in the Production, Dissemination, and Pricing of Street Earnings

In September 2009, Thomson Reuters (TR) discontinued its practice of relying on analysts to determine the treatment unexpected charges and gains in favor their immediate exclusion from GAAP earnings. Adopting a difference-in-differences approach, we show that this plausibly exogenous change TR's methodology resulted street earnings are more predictive future performance; timelier, accurate, less dispersed analyst forecasts earnings, consistent with TR enhancing properties forecasts. Finally, using path analysis significant portion effect price discovery is through analysts; items increased (decreased) relative influence (analysts) pricing We conclude forecast data providers like than conduit information investors.