Call it financial climate change: we could one day see fewer earnings seasons.
Driving the news: Donald Trump posted on Truth Social calling for the removal of mandatory quarterly earnings reports for publicly traded companies in the U.S., arguing that reporting requirements should be reduced to every six months from every three months.
- Trump’s comments follow news that the upstart exchange the Long-Term Stock Exchange plans to file a petition with the Securities and Exchange Commission arguing for semi-annual reporting.
Why it’s happening: Advocates argue that the burden of the quarterly report has made companies near-sighted, as they try to hit quarterly forecasts at the expense of pursuing big-picture goals. Reducing this burden will give execs the leeway to focus on longer-term growth.
- The stress and complexity of quarterly earnings have also been cited as a main reason for the IPO slump that has plagued both the U.S. and Canadian markets.
Why it matters: The change might come at the expense of investors who, understandably, like to have more transparency into where they’re putting their money. Fewer earnings calls mean fewer opportunities to get a pulse check on investments.
In Canada: Public companies must report earnings within 45 days of quarter-end and post an annual report within 90 days of year-end. But if the U.S. moves to a semi-annual basis, Canada could follow suit. In fact, the Canadian Securities Administrators previously looked into the idea.—QH