Trump wants US companies to stop reporting quarterly results
&imwidth=600&imheight=450&format=webp&quality=medium "Trump wants US companies to stop reporting quarterly results")
US President Donald Trump Photograph: (AFP)
Trump has called for US companies to stop reporting quarterly results, adding that a shift to publishing figures twice a year will save them cash and allow executives to focus on their businesses and long-term growth and management.
President Donald Trump said on Monday that he thinks US companies should not report their earnings quarterly and should do it every six months instead, proposing a change that would disrupt a longstanding practice and would require an approval from 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 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 require quarterly reports, while in the UK and Europe, companies publish financial results every six months. The US shifted to the quarterly model in 1970.
Trump had asked for the change in the US during his first term as well.
It is hard for companies and executives to share numbers every three months, and the practice is also criticised for leading to short-term thinking and planning. However, it is defended by some who say it provides higher transparency and is crucial for investors.
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Under the US Securities Exchange Act of 1934, public companies must file quarterly reports disclosing information, including unaudited financial statements, to provide “a continuing view of the company’s financial position during the year.”
Quarterly reports have to be filed for each of the first three fiscal quarters of the company’s fiscal year, with an annual report summarising full-year results.
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“The underlying basis of the reporting requirements is to keep shareholders and the markets informed on a regular basis in a transparent manner,” the SEC says on its investor.gov website.
In a policy research brief, the CFA Institute’s Research and Policy Center says that timely and accurate financial information is the lifeblood of financial markets.
Quarterly reporting of financial information creates a more level playing field for access to financial information between insiders and outside investors and shareholders and ultimately promotes greater investor confidence and improved capital allocation, it added.
