Does good news cover bad news?

Does good news cover bad news? We present evidence from the Chinese stock market, in which the fiscal year is always the same as the calendar year. Listed firms are required to announce their annual report by the end of April, coinciding with the deadline for the release of their first-quarter reports. We find that firms with negative earnings surprises in the previous year are more likely to postpone the announcement of their annual report until they announce their first-quarter report. However, we find no evidence to suggest that this bundling disclosure weakens market responses to information in annual reports.