Abstract
The authors examine whether acquiring companies strategically time their quarterly earnings and merger and acquisition announcements. Acquiring companies have the ability and incentive to alter the sequence of these 2 types of announcements to optimize the market’s perception of the firm. The authors show that acquiring companies are more likely to announce earnings before mergers and acquisitions if their earnings meet analyst expectations, especially if the acquiring company plans to use stock as a full or partial method of payment. Additionally, the authors find that companies that announce favorable earnings profiles create a more positive news environment and generate higher abnormal returns for their subsequently announced acquisitions.