President Trump said companies should no longer be required to report their earnings on a quarterly basis, an idea he explored during his first term that has gained traction recently.
Publicly traded companies in the U.S. have reported results every three months for the past 50-plus years.
Instead, Trump argued, companies should report their earnings every six months. “This will save money, and allow managers to focus on properly running their companies,” Trump wrote on Truth Social on Monday.
His proposal echoes one from the Long-Term Stock Exchange, which said last week it plans to petition the Securities and Exchange Commission to eliminate the quarterly reporting requirements. LTSE instead proposed giving companies the option to share results twice a year.
Current SEC leadership has signaled an interest in reducing regulation, and LTSE representatives were encouraged following a recent meeting with SEC officials about their planned proposal, The Wall Street Journal reported last week.
The move is likely to face opposition from investors who rely on the transparency of regular disclosure and crave more. Quarterly earnings reports typically go hand-in-hand with earnings calls that allow analysts to ask questions of company executives.
“One of the reasons I invest in public companies instead of private companies more often is because you get that information,” said James McRitchie, an individual investor in roughly 350 companies. “Timeliness is important.”
Any change would take a while to come to fruition. The SEC typically publishes proposals it receives and requests public comments.
LTSE is a stock-trading venue for companies focused on long-term goals. Its proposal would apply to all U.S. public companies, not just the few listed on its exchange.
Advocates of doing away with quarterly reporting requirements believe such a change could revive the shrinking number of public companies in the U.S. Would-be public companies often cite the time-consuming and costly clerical work required to list and maintain publicly traded shares as a major factor in decisions to stay private or sell themselves instead.
Publicly listed companies in Europe are no longer required to report earnings on a quarterly basis following a 2013 rule change, but many still choose to do so. The U.K. also ended quarterly reporting requirements about a decade ago despite many companies continuing to report.
The number of publicly traded companies in the U.S. is about 3,700 as of late June, down roughly 17% from three years ago, according to the Center for Research in Security Prices. That number has roughly halved since its peak in 1997.
Trump explored ending quarterly earnings reports during his first term, saying at the time that he had spoken to top business leaders and arguing it would allow for more long-term planning. In 2018, he asked regulators to study such a change, but the effort went nowhere.
That same year, JPMorgan Chase CEO Jamie Dimon and legendary investor Warren Buffett co-wrote an opinion piece in The Wall Street Journal supporting the idea to move away from reporting quarterly earnings estimates, though made clear they weren’t opposing quarterly reporting itself. The pair argued that companies hold back on spending and hiring to meet quarterly earnings forecasts.
Publicly traded corporations have been required to submit quarterly earnings reports since 1970.
