Market reaction to quantitative and qualitative order backlog disclosures

Ronen Feldman, Suresh Govindaraj, Joshua Livnat, Kate Suslava*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

6 Scopus citations


Analysts and practitioners have long sought information on order backlog (OB) as indicators of future sales, and in turn, of future earnings and stock returns. OB disclosures, though mandatory for annual reports, are voluntarily included in some quarterly reports and are sometimes presented only in textual narration. Given that the required annual OB data may be partially preempted by voluntary quarterly disclosures, we test whether quarterly OB disclosures are used by market participants, especially the qualitative OB disclosures, which were not tested before. We show that OB growth is helpful in forecasting future sales and thus assign a positive tone to qualitative OB disclosures that indicate OB growth. Both quarterly quantitative OB increases and positive qualitative tone are associated with immediate and drift returns, after controlling for other disclosures during the quarterly earnings announcements and variables that affect voluntary disclosure. Our results indicate that regulators may need to consider requiring OB disclosures in quarterly intervals when OB is sufficiently material.

Original languageAmerican English
Article number106897
JournalJournal of Accounting and Public Policy
Issue number6
StatePublished - 1 Oct 2021

Bibliographical note

Publisher Copyright:
© 2021 Elsevier Inc.


  • Earnings surprise
  • Future sales growth
  • Order backlog
  • Qualitative disclosures
  • Stock returns


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