Asymmetric Timeliness of Earnings and Shareholder Distributions

We study the relation between asymmetric timeliness of earnings and firms' decisions to distribute assets to shareholders. We find that asymmetric timeliness of earnings is positively related to asymmetric sensitivity of shareholder distributions. We also find that firms with more asymmetrically timely earnings have lower distributions to shareholders, particularly when in financial distress. These results suggest that asymmetric timeliness of earnings constrains distributions to shareholders when such distributions are likely to transfer wealth from bondholders to shareholders.