The quarterly earnings report may be no more if President Trump has his way. The president posted on his social media platform, Truth Social, on Monday that public companies should only have to report their earnings every six months instead of quarterly, as they have for over 50 years.
“This will save money, and allow managers to focus on properly running their companies,” Trump claimed in his post.
The idea to end quarterly reporting has gained some traction. According to the Wall Street Journal, “current SEC leadership has signaled an interest in reducing regulation” and the Long Term Stock Exchange (LTSE), an exchange focused on encouraging long-term business goals, is planning to submit a proposal to the SEC to end quarterly reporting.
“We hear a lot about how it’s overly burdensome to be a public company,” Bill Harts, the exchange’s CEO, told the Wall Street Journal last week. “This is an idea whose time has come.”
The LTSE recently wrote in a statement that the focus on quarterly reporting, and the pressure to meet short term metrics, encourages short-term thinking at the expense of long-term value creation. However, investors will likely push back on the proposal, as quarterly reporting offers them more insight into a company’s performance and allows them regular access to company executives on earnings calls.
This isn’t the first time that Trump has floated eliminating quarterly reporting. In 2018, he tasked the SEC with studying the idea, but nothing came of it.
It would be some time before companies would see any changes in financial reporting requirements, as significant changes to SEC rules can take years to implement.
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