Number of Numbers: Does Quantitative Disclosure Reduce Uncertainty in Quarterly Earnings Conference Calls?

This paper investigates the ratio of quantitative and qualitative content in disclosure and finds that the proportion of qualitative and quantitative information in disclosures contains value-relevant information for investors, since executives tend to use qualitative information, which is less precise, to obscure their poor performance. I calculate the proportion of numbers to words in conference call transcripts as a proxy for the proportion of quantitative information. Using this measure, I find that the proportion of quantitative information is positively related to operating and financial performance. I also find that managers are more likely to talk up their performances when using lower proportion of quantitative information. In addition, a high proportion of quantitative information is associated with a more positive stock price reaction, suggesting that a high proportion of quantitative information also conveys positive information about the firm. Finally, investors do not fully incorporate this information in the stock prices. A high proportion of quantitative information predicts a positive drift in stock returns after the conference call date.