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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 says that cadence should 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.
“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 said in his online post. “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!!!” Trump said on Monday.
Trump has 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.
Executives from Elon Musk to Larry Fink to James Gorman have criticized various elements of the quarterly reporting requirement. Proponents of the change 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.
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