Every three months, the CEOs and CFOs of public companies repeat a familiar process: They begin preparing to disclose their quarterly earnings to investors.
President Donald Trump wants that cadence to change.
In a Truth Social post on Monday, Trump said that US companies should be able to report their earnings every six months, not every three months as currently required by the SEC.
“This will save money, and allow managers to focus on properly running their companies,” Trump said in his post.
“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!!!” Trump said on Monday.
Trump floated the idea of lengthening the earnings report cycle in his first term.
In a 2018 post on what was then Twitter, Trump said he had heard from business leaders that semi-annual earnings reports would help them save money.
“In speaking with some of the world’s top business leaders I asked what it is that would make business (jobs) even better in the U.S. ‘Stop quarterly reporting & go to a six month system,’ said one. That would allow greater flexibility & save money. I have asked the SEC to study!” Trump said in 2018. The SEC never implemented the change.
The modern requirement for publicly traded companies to report quarterly earnings goes back to 1970, when the SEC made it a requirement.
CEOs have publicly criticized the short-term focus of quarterly earnings — and guidance
Executives from Elon Musk to Larry Fink to James Gorman have criticized various elements of the quarterly reporting requirement over the years.
Proponents of lengthening the reporting cadence say transitioning to a twice-a-year requirement would let companies focus more on long-term performance. Advocates of the current quarterly requirement say that it gives investors more information and leads to fairer pricing of a company’s stock.
“Today’s culture of quarterly earnings hysteria is totally contrary to the long-term approach we need,” BlackRock CEO Larry Fink wrote in his 2016 letter to shareholders.
“To be clear, we do believe companies should still report quarterly results — ‘long-termism’ should not be a substitute for transparency — but CEOs should be more focused in these reports on demonstrating progress against their strategic plans than a one-penny deviation from their EPS targets or analyst consensus estimates,” Fink wrote.
Warren Buffett and Jamie Dimon criticized “short-termism” in a 2018 op-ed for The Wall Street Journal and encouraged public companies to “consider moving away from providing quarterly earnings-per-share guidance.”
“Our views on quarterly earnings forecasts should not be misconstrued as opposition to quarterly and annual reporting,” the two business leaders wrote. “Transparency about financial and operating results is an essential aspect of US public markets, and we support being open with shareholders about actual financial and operational metrics.”
The European Union moved to remove a quarterly reporting requirement for EU-listed issuers in 2013, which took effect two years later. The EU requires that listed companies report earnings twice a year: Once for the first six months of their fiscal year, and again for the end of the year.
Quarterly reports “can enhance investors’ ability to predict future earnings,” according to a 2024 study by a team of researchers at the University of Texas at Austin, University of British Columbia, and George Mason University, among other colleges.
Their research suggested that companies’ stock returns correlated better with future earnings when they reported earnings each quarter than when they did twice a year.
