President Donald Trump said he think U.S. companies should report earnings every six months instead of quarterly, a controversial change that would disrupt longstanding practice and requires approval by the nation’s securities regulator.
“Subject to SEC Approval, Companies and Corporations should no longer be forced to “Report” on a quarterly basis (Quarterly Reporting!), but rather to Report on a “Six (6) Month Basis,” Trump wrote on Truth Social this morning.
“This will save money, and allow managers to focus on properly running their companies. Did you ever hear the statement that, “China has a 50 to 100 year view on management of a company, whereas we run our companies on a quarterly basis???” Not good!!!”
China in fact does requires quarterly reports but the U.K. and Europe only ask companies to deliver financial results every six months. The U.S. shifted to the quarterly model in 1970.
Trump had asked for the change in the U.S. during his first term as well.
The barrage of numbers every three months is a time suck for companies and executives and has been criticized for leading to a focus on short-term thinking and planning. Supporters say the transparency they provide every 90 days is key for investors and necessary for markets to function properly.
CEO taking companies private have commented for years on the relief on not having to square off with investors every 90 days with numbers that can fluctuate short term for a whole host of reasons but meanwhile cause big movements in the stock price on earnings days. In media, for instance, shares of companies like Spotify and Snap can be extremely volatile after earnings reports. That’s also been the case for Netflix, which stopped reporting quarterly subscriber numbers, calling them a distraction from other key measures of the health of is business.
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