President Trump wants to cancel the quarterly earnings report.
In a post about the Truth Society, Trump said that securities regulators should stop requiring companies to issue financial reports every three months, instead using a six-month reporting period. Since 1970, the SEC has requested quarterly reports of publicly traded companies.
“This will save money and allow managers to focus on running their company correctly,” Trump wrote.
Trump asked the SEC to examine the three-month six-month reporting requirements during his first term. No change.
Supporters of the change say quarterly reports are too expensive and time-consuming and preventing companies from wanting to be public. They also say that company executives are too focused on achieving quarterly earnings targets, and are not enough on long-term plans.
The long-term stock exchange also calls on companies to report changes in their frequency of financial performance. LTSE, a stock market that advocates companies to focus on long-term goals and performance, said earlier this month that it will file a petition to the SEC to report earnings results semi-annual and have the option to submit earnings quarterly.
“This petition is a key step towards focusing a true long-term company on sustainable growth rather than quarterly noise,” LTSE CEO Maliz Beams said in a statement on the petition on the plan.
Those in favor of quarterly earnings said the reports provide investors with valuable financial updates and make them aware of any new risks facing the company.
George Mason University Donald G.
Koo also said that this was the original principle of the SEC’s policy change in 1970, requiring companies to disclose their financial results quarterly rather than semi-annual. It originated from an economy that flourished after World War II and then fell into recession. Companies that thrive during expansion can then mask shrinking profits during the downturn, which hurt investors.
“The purpose of quarterly reports is to reduce information asymmetry,” Koo said.
