US companies wanting to manage market expectations and boost their share prices should release good earnings news as soon as possible but keep bad news under wraps until the last minute, says a study to be released on Monday.

The findings offer an unprecedented insight into the release of price-sensitive information, showing that right timing can more than double the size of a share price rise or significantly curtail a fall.

The issue is all the more important at a time when institutional investors and hedge funds are focused on short-term price movements.

The study, by Reuters Estimates, aims to quantify the difference in the movements of share prices of companies that “pre-announced” their earnings and companies that choose to “surprise” the market on the scheduled release date.

US companies have greater discretion than their counterparts in other countries on when to release earnings news.

The study looked at S&P 500 companies between 2003 and 2006. It found that seven out of 10 companies that pre-announced good earnings experienced a price rise on the day after the announcement. Yet, only 55 per cent of companies that stuck to their schedule and surprised the market were rewarded with an increase in price.

Pre-announcements led to an average share price rise of more than 5 per cent, nearly double the average rise caused by positive earnings surprises.

Early last week, for example, the fast food chain McDonald’s saw its shares rise more than 4.5 per cent after pre-announcing to the market that its results, released on Friday, would be better than expected.

“The message is: if you have good news, get it out and let the market know,” said Ashwani Kaul, senior research analyst at Reuters Estimates. However, profit warnings only served to darken the market’s mood.

The average share price fall for companies that gave the market notice of their problems was 7.4 per cent, well above the 2 per cent average declines caused by negative earnings revealed on results day.