Do supplementary sales forecasts increase the credibility of financial analysts' earnings forecasts

I examine whether the market reacts more strongly to earnings forecast revisions when financial analysts supplement their earnings forecasts with sales forecasts. I find that earnings forecast revisions supplemented with sales forecast revisions have a greater impact on security prices than stand-alone earnings forecast revisions. Supplemented earnings forecasts are more accurate and timely than stand-alone earnings forecasts, controlling for other individual analyst characteristics. Financial analysts who provide supplementary sales forecasts are more likely to be employed by smaller brokerage houses and less experienced. These results suggest that supplementary sales forecasts add credibility to earnings forecast revisions, and that financial analysts provide sales forecasts to convey their ability in earlier stages of their career.