The reaction of the capital market to the seasonal profit behavior of companies

The aim of this study is to investigate the information content of quarterly earnings announcements of firms in Tehran Stock Exchange's information needs of stakeholders and investigate influential factors on it and then propose optimal model. To provide a measure of how much value-relevant information is provided at earnings releases, we calculate the adjusted R2 from a regression of calendar-year returns on returns in each of the four seven-day announcement “event windows” during the year. In order to investigate more, we investigate the factors affecting this information content. Therefore, the financial data of 106 firms for the period between the years 1385 to 1389 were analyzed. Results showed that announcement of quarterly earnings an average of 9 to 17 percent of total annual information that affect stock prices of companies and this indicates that the primary role of announcement of quarterly earnings for investors and other stakeholders is not to provide timely information, but it increase the reliability of other sources of information that issue timelier. Also other results of this study show that there are a significant positive relation between the information content of quarterly earnings announcements and some variables such as growth opportunities and quality and nature of earnings and a negative and significant relationship with the size, financial leverage and age of firm. Finally optimal model of research are propose in below: