COVID-19 profit warnings: Delivering bad news in a time of crisis

Profit warnings (large negative earnings surprises) are important corporate reporting documents for delivering bad news and a distinctive communication genre. The 2020 COVID-19 exogenous shock provides unique worldwide crisis context company disclosure of news. research develops genre-based typology/analytical framework assessing profit warnings’ quality comprising: (1) Four warning/forecast characteristics (2) Eight disclosures. For sample 160 profit-warning documents, the manually analyses their content, culminating in score/index. tests model factors influencing quality. finds companies regress to silence when investors most need guidance poor-quality disclosure, coy ambiguous language, possibly reflecting minimal regulatory on this form report. Two variables significant – disclosed following Financial Reporting Council higher varies by industry. paper faux performativity which may allow boards directors tick-box compliance with market abuse regulations. concludes recommendations policymakers improvements required enhance these highly documents.