(Bloomberg) Public companies in the U.S. are doing more to burnish the results they present to investors than ever before. It isn’t working.

That’s according to new research by Sanford C. Bernstein & Co. quantitative analysts led by Ann Larson, who found that the amount of ongoing expenses being held out of adjusted earnings reported by the biggest corporations has never been higher. What’s more, the worst offenders see stock returns suffer versus the broader market.

The study is the latest entry in a widening debate about the use of pro forma or adjusted presentations by companies in their communications with shareholders. Bernstein found that the ones who depart from generally accepted accounting principles in one particularly brazen way usually pay a penalty in the equity market.

“There’s not a lot of earnings growth in the market right now, so if they can make some by excluding more things, they will,” said Larson. “We find that the ones most aggressively doing that and aggressively managing their earnings, they do tend to see their cash flow growth decline going forward and will underperform.”

The analysis measures charges left out of the adjusted earnings figure which can’t be classified as clear-cut one-time items. Firms excluded potentially recurring charges to the largest degree in at least 18 years in 2015, data from Bernstein show. Based on quarterly returns of the 1,500 largest U.S. stocks from 1998 to present, shares with the biggest exclusions lag behind the market by 1.7 percent.

Companies that offer adjusted results generally do so in press releases that also detail earnings in a standard accounting presentation, leading some analysts, such as Morgan Stanley’s Adam Parker, to question whether investors are likely to be misled. Combined with the relatively small number of companies driving the gap, there shouldn’t be cause for concern, Parker wrote in a note to clients in April.

Rather than focusing on the difference between pro-forma and GAAP earnings, separating out “other exclusions” from “special items” is particularly telling, said Bernstein’s Larson. The “other” category can include charges like stock-based compensation, asset write-downs and costs related to acquisition. While management may consider those items extraordinary, they’re frequently the cost of doing business and warrant investor caution when it comes to assessing future prospects, she said.

“Some of the one-time exclusions are legitimate, and if you make no differentiation between those that are and those that aren’t, you’d conclude that it doesn’t make a difference,” Larson said. “Things like asset write-downs and M&A—some people would say those things aren’t recurring. But energy companies for example have had write-downs for two years. That’s real money lost.”

Indeed, energy and raw-materials companies were the worst offenders this past quarter, largely due to cuts in the value of assets after oil plunged nearly 30 percent in the first two months of the year.

But it’s not all commodity-sensitive stocks. Technology and health-care companies were the next-worst industries in terms of aggressively managing adjusted earnings, in Bernstein’s research. Those exclusions included more stock based compensation and merger and acquisition charges.

The weakness in energy and mining stocks also can’t account for the difference in returns. Broken out into 14 sub-sectors, companies with the largest amount of exclusions underperform in each of the industries expect transports. Telecommunications and health care service companies in the worst quintile have the weakest comparative returns of any industry, falling more than 3 percent relative to the market. By the same measure, energy fell 1.5 percent.

Smaller stocks with large spreads between pro-forma and GAAP earnings also tend to fare worse in the market. Shares in the Russell 2000 index with wider gaps underperform those with small gaps by nearly 3 percentage points, data from Barclays Plc show.

In 2015, other exclusions accounted for 50 cents a share on average of the gap between pro-forma and GAAP EPS, up from 19 cents in 2014, data from Bernstein show. The measure has been increasing as executives compensate for tepid earnings growth to assuage investor concern, said Alan Gayle, a senior strategist at Atlanta-based RidgeWorth Investments, which has about $37 billion in assets. Analysts estimate first-quarter profit for S&P 500 companies declined 7.4 percent and will fall 5 percent in the second.

“Investors are looking for companies that will perform well in a challenging environment and are starting to look more carefully in earnings statements to see what looks more sustainable and what’s challenging to sustain,” Gayle said. “When there are a bunch of exceptions like this, you have to ask whether these companies are really prepared to excel in the second half of the year.”

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