Trump calls for end of quarterly earnings reports in the US

President Donald Trump has recently proposed eliminating the requirement for publicly traded companies to issue quarterly earnings reports. Instead, he suggests switching to a six-month reporting period, arguing that this change would save money and allow managers to focus on the core operations of their companies. The Securities and Exchange Commission has mandated quarterly reporting since 1970, but Trump and other proponents of this shift believe that it is too costly, time-consuming, and ultimately counterproductive.

Trump’s call for a change in reporting requirements is not new. During his first term, he urged the SEC to review the frequency of reporting, but no action was taken at that time. Advocates for the switch point out that the current system incentivizes short-term thinking and a fixation on meeting quarterly earnings targets, often at the expense of long-term strategic planning. They argue that reducing reporting frequency would enable companies to concentrate on sustainable growth and performance, rather than being driven by the demands of the market every three months.

The Long-Term Stock Exchange (LTSE), a platform that promotes a focus on long-term goals and performance, has also voiced support for semi-annual reporting. They plan to submit a petition to the SEC, advocating for companies to have the option of reporting their earnings twice a year. By providing this flexibility, the LTSE believes that companies can escape the pressure of quarterly noise and concentrate on their long-term strategies.

On the other hand, proponents of quarterly reporting contend that these financial updates are essential for investors to assess a company’s financial health and risk factors. In a 2024 report, David S. Koo, an accounting professor at George Mason University, highlighted how more frequent reporting offers investors valuable context and perspective on a company’s performance. The SEC’s move to require quarterly reporting in 1970 was a response to a post-World War II economic boom that ended in a recession, revealing the necessity to reduce information asymmetry and protect investors by ensuring transparency.

Ultimately, the debate over the frequency of financial reporting centers on the balance between transparency and long-term value creation. While some argue that a shift to semi-annual reporting would improve companies’ strategic focus and reduce market pressure, others maintain that quarterly reports are vital for investors to make informed decisions. As the discussion continues, it remains to be seen whether Trump’s proposal will gain traction and lead to a fundamental change in how companies communicate their financial performance to the public.