Trump says asking SEC to consider ending quarterly earnings reports

  • Trump says asking SEC to consider ending quarterly earnings reports

Trump says asking SEC to consider ending quarterly earnings reports

The president on Friday said he has asked federal regulators to study whether public companies should be required to report results half as often as they now do - every six months instead of every three months, or once a quarter.

"I asked [the leaders] what it is that would make business (jobs) even better in the U.S.", Trump tweeted.

In a tweet early today, Trump said that after speaking with several top business leaders, he's asking the Securities and Exchange Commission to determine whether shifting to a six-month reporting requirement would help companies grow faster and create more jobs. I asked, what could we do to make it better?

Eliminating the quarterly reporting requirements could also lead investors to fill the information vacuum by relying more heavily on rumors and off-the-cuff remarks made by company executives, corporate governance experts say.

American firms should no longer have to report on a quarterly basis, USA president Donald Trump has said. One criticism is that if companies are striving to report profit gains every quarter, they are more likely to buy back shares and cut costs than invest in their businesses.

"My comments were made in that broader context, and included a suggestion to explore the harmonization of the European system and the US system of financial reporting".

But critics contend that new reporting requirements may not spur meaningful change given the deluge of company information available on social media. "In the end, all companies have to balance short-term and long-term performance".

Others said quarterly disclosures are essential for investment decisions and support richer US stock valuations, and that a change could make shares more volatile.

But he said energy companies would probably still report some oil and gas well data every three months to please investors. A spokeswoman for Chairman Jay Clayton did not respond to a request for comment. "So we're looking at that very, very seriously".

The discussion with Pepsi's CEO wasn't the first time White House officials have heard from the business community about quarterly reporting requirements.

The SEC consists of five commissioners appointed by the president, although there now are only four in place, three named by Trump, including Clayton.

The Trump administration has said it would like to reduce red tape it blames for a decline in public listings.

Last fall it laid out changes to capital market rules in a U.S. Treasury report, but did not advocate scrapping quarterly reporting.

He would need to draft a proposed rule-change which would then be put to an industry consultation during which investors, companies, exchanges, pension funds and public interest groups would likely bombard the SEC with information. But quarterly reports on results are distinct from the so-called earnings guidance that company executives provide as a forecast.