President Donald Trump renewed calls on Monday to move away from quarterly corporate reporting requirements.
Echoing an idea from his first term (see below), Trump again proposed a six-month schedule that, he says, would reduce costs and allow U.S. executives to prioritize long-term growth.
Trump's proposal comes about a week after the Wall Street Journal reported that the Long-Term Stock Exchange plans to petition the U.S. Securities and Exchange Commission to give companies the option to share results twice a year.
The shift would mark a significant change in U.S. corporate operations and align reporting rules more closely with public companies in Europe, where semi-annual reports are standard. Some Asian markets also follow six-month reporting cycles.
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Expert Ideas
Financial professionals and other commentators weighed in on Trump's proposal.
Financial commentator Phil Bak expressed concerns that less frequent reporting could result in the loss of trust in financial markets and shake investor confidence.
"God help us if the markets squander trust," Bak wrote in a social media post.
Editor and CNBC contributor Herb Greenberg pointed to company-issued forward guidance as driving "short-termism" rather than quarterly reports.
"Reporting quarterly is a good thing. The issue is guidance, short OR long-term. THAT’S what creates the short-term volatility as the algo’s and everybody else play to THAT, and companies kowtow to the ‘meet or beat’ game," Greenberg wrote on X.
On the other hand, CNBC host Jim Cramer said that judging CEOs "by the quarter" is "brutal."
He added that it would be better for the executives if companies reported on a six-month schedule, adding that "we are too short-sighted."
Companies attempting a long-term turnaround often get slaughtered on a single quarterly report, Cramer said.
However, he said that as an investor, he would want companies to report every six weeks for transparency.
The Takeaway
Cramer's views illustrate the two different perspectives on the value of quarterly reports:
On one hand, quarterly reports are essential for transparency and investor decision-making, while at the same time create a focus on short-term results and increase market volatility.
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