This paper examines whether income smoothing improves or garbles the informativeness of earnings about future performance. The authors measure income smoothing as the negative correlation between a firm's change in discretionary accruals and its change in pre-managed earnings. Using the Collins, Kothari, Shanken, and Sloan (CKSS) approach, they find that higher-smoothing firms have stock prices that contain more information about their future earnings compared to lower-smoothing firms. This result is robust to decomposing earnings into cash flows and accruals, controlling for firm size, growth, future earnings variability, private information search activities, and cross-sectional correlations. The study contributes to the literature by providing empirical evidence that income smoothing enhances the informativeness of past and current earnings about future performance.This paper examines whether income smoothing improves or garbles the informativeness of earnings about future performance. The authors measure income smoothing as the negative correlation between a firm's change in discretionary accruals and its change in pre-managed earnings. Using the Collins, Kothari, Shanken, and Sloan (CKSS) approach, they find that higher-smoothing firms have stock prices that contain more information about their future earnings compared to lower-smoothing firms. This result is robust to decomposing earnings into cash flows and accruals, controlling for firm size, growth, future earnings variability, private information search activities, and cross-sectional correlations. The study contributes to the literature by providing empirical evidence that income smoothing enhances the informativeness of past and current earnings about future performance.