Trump says companies should no longer report quarterly
The article reports that former President Donald Trump suggested that U.S. companies should switch from quarterly financial reporting to semiannual reporting. Trump argued that this change would save money and allow company managers to focus more effectively on running their businesses,rather than being pressured by short-term earnings results. He referenced the idea that companies in China have a long-term management perspective compared to the short-term focus driven by quarterly reports in the U.S.
The proposal would require approval from the Securities and Exchange Commission (SEC), which mandated quarterly reporting for public companies since 1970.If adopted, the U.S.would align more closely with the United Kingdom and the European Union, where companies are required to report twice a year but may provide quarterly updates voluntarily.
Supporters claim quarterly reports are costly and time-consuming, while critics warn that eliminating them could reduce clarity and increase market volatility. Notable business leaders like JPMorgan Chase’s Jamie Dimon and Berkshire Hathaway’s Warren Buffett have previously expressed support for reducing the frequency of earnings reports, citing the negative impact of short-term profit focus on long-term growth and sustainability.
This is not the first time Trump has advocated for ending quarterly reporting; he raised the issue during his first term, but the SEC did not make changes then. The article also notes that, contrary to Trump’s claim, Chinese companies do file quarterly reports, alongside semiannual and annual ones.
Trump says companies should end quarterly reports: ‘This will save money’
President Donald Trump on Monday said companies based in the United States should start reporting every six months instead of every three months per year, adding that the shift will save cash and keep executives focused on their businesses.
“This will save money, and allow managers to focus on properly running their companies,” Trump wrote on Truth Social. “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!!!”
Despite Trump’s comments about China, the foreign nation’s companies do file quarterly reports as well as semiannual and annual reports. However, companies on the Hong Kong stock exchange only file semiannual reports.
The move would require approval from the Securities and Exchange Commission. In 1970, the agency first required quarterly reporting for U.S. public companies.
If mandatory quarterly earnings reports are no longer required, the U.S. would become more in line with the United Kingdom and the European Union. Companies there are required to report twice a year but are allowed to submit quarterly reports.
Supporters of the policy change argue quarterly reporting is too expensive and time-consuming, while critics say it would lead to decreased transparency and increased market volatility.
In 2018, JPMorgan Chase CEO Jamie Dimon and Berkshire Hathaway CEO Warren Buffett supported the idea of reducing or eliminating quarterly reports.
“In our experience, quarterly earnings guidance often leads to an unhealthy focus on short-term profits at the expense of long-term strategy, growth and sustainability,” the two billionaires wrote in a Wall Street Journal op-ed.
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This isn’t the first time Trump has called for the end of quarterly reporting.
During his first term, he asked the SEC to consider semiannual reports instead of quarterly. The agency made no recommendations at the time.
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