Can Analysts Elicit Useful Information by Asking Unique Questions in Earnings Conference Calls?

We examine whether analysts can gather useful information based on their public interactions with firm managers. We use measures of textual similarity to capture the uniqueness of an individual analyst's question(s) on a firm's quarterly earnings conference call relative to the questions of other analysts on the same call, relative to the analyst on prior firm calls, and relative to the management-prepared narrative. We first examine the associations between the uniqueness of analysts' questions and analysts' characteristics. We observe that the uniqueness of individual analysts' questions varies systematically with analysts' access to private meetings, experience, broker size, forecast frequency, and number of firms followed. Next, we examine how differences across analysts' questions impact topics discussed, analysts' revisions and their accuracy, and the market's reaction to the conference call in general as well as the reaction when analysts' unique questions engender a revision. Overall, we provide evidence about how analyst question uniqueness helps analysts form their forecasts and how the market interprets differences across analysts' public interactions with firm managers.