The paper examines the rewards to meeting or beating earnings expectations (MBE) and tests alternative explanations for these rewards. The study finds that MBE has become more prevalent in recent years, and the pattern of achieving MBE is consistent with both earnings management and expectation management. After controlling for overall earnings performance, firms that meet or beat their earnings expectations enjoy an average quarterly return that is nearly 3% higher than those that do not. Despite investors potentially discounting MBE cases due to the possibility of management or expectation manipulation, the premium remains significant. The results also suggest that MBE is informative about future firm performance, supporting an economic explanation for the premium placed on earnings surprises. The paper concludes by discussing the implications of these findings for investors and managers.The paper examines the rewards to meeting or beating earnings expectations (MBE) and tests alternative explanations for these rewards. The study finds that MBE has become more prevalent in recent years, and the pattern of achieving MBE is consistent with both earnings management and expectation management. After controlling for overall earnings performance, firms that meet or beat their earnings expectations enjoy an average quarterly return that is nearly 3% higher than those that do not. Despite investors potentially discounting MBE cases due to the possibility of management or expectation manipulation, the premium remains significant. The results also suggest that MBE is informative about future firm performance, supporting an economic explanation for the premium placed on earnings surprises. The paper concludes by discussing the implications of these findings for investors and managers.