Trump revives call to ditch quarterly earnings reports. What comes next?

By James Rogers

European companies already report twice yearly. Trump wants to allow U.S. businesses to do the same.

President Donald Trump reiterated his call for companies to ditch quarterly reporting in a post on Truth Social early Monday.

President Donald Trump wants companies to ditch quarterly reporting and instead post results every six months - a move that could be dramatic for U.S. investors but has international precedent.

Trump brought up the issue during his first term in office, and he was back with a new call in a post on his Truth Social network early Monday. "This will save money, and allow managers to focus on properly running their companies," he wrote. Trump said that the matter is "Subject to SEC Approval."

A spokesperson for the Securities and Exchange Commission told MarketWatch that Chairman Paul Atkins and the agency are "prioritizing this proposal to further eliminate unnecessary regulatory burdens on companies."

A six-month corporate reporting schedule is already used in Europe. European companies report twice a year, although they sometimes give more frequent updates.

The action by the Securities and Exchange Commission would be "an easy win for SEC Chair Paul Atkins to deliver to the president," TD Cowen analyst Jaret Seiberg said in a note on Monday, adding, "it is consistent with his deregulatory views."

He doesn't expect a proposal until 2026 at the earliest, however.

Switching from quarterly to semiannual reporting would not require congressional approval, needing only a vote from the SEC, which has a 3-to-1 Republican majority. However, it would typically take six to 12 months to go through the procedural steps to implement this sort of change, Evercore ISI's Sarah Bianchi said in a Monday note.

There has been a push for change on this issue by some in the financial industry, according to TD Cowen's Seiberg. Last week, The Wall Street Journal reported that the Long-Term Stock Exchange, a niche exchange that says it caters to investors taking a bigger-picture view of things, plans to petition the SEC to eliminate the requirement for quarterly earnings reports. The LTSE also wants companies to have the option of reporting every six months and is looking to drive changes that go beyond just companies listed on its own exchange.

The quarterly earnings cycle has been criticized by high-profile figures such as Elon Musk, who has previously described the "enormous pressure" placed on Tesla Inc. (TSLA) to make decisions based on short-term needs rather than long-term objectives.

Former PepsiCo Inc. (PEP) Chief Executive Indra Nooyi was also a critic of the quarterly reporting system.

The number of publicly traded companies in the U.S. has declined dramatically in recent decades. There were more than 7,000 publicly listed companies in the U.S. in 1996, but less than 4,000 in 2020, according to data from Dartmouth's Tuck School of Business. Over the same period, the number of public companies in non-U.S. advanced economies rose from about 4,000 to 20,000.

The diminishing role played by public companies in the American financial system has been highlighted on several occasions by JPMorgan Chase & Co. (JPM) Chief Executive Jamie Dimon. In his 2023 annual letter to shareholders, Dimon said that intensified reporting requirements could be one of the factors driving companies away from the public markets.

Each year, public companies in the U.S. spend over 15 million people-hours collectively producing securities disclosures, according to research from Emory University's School of Law.

Stacey Ritter, an assistant professor of accounting at the Leavey School of Business at Santa Clara University, told MarketWatch that the proposal to move from quarterly to semiannual reporting could be a mixed bag.

Fewer reporting deadlines may reduce transparency for investors and slow market efficiency, she said, but they also can give managers breathing room and reduce compliance costs.

Quarterly reporting can also cause pressures that dig an earnings hole that grows exponentially, according to Ritter, even becoming a major driver of fraud risk, or what she terms "the fraud trap."

"Moving to semiannual reporting could slow the spiral and reduce fraud risk - but should be paired with strong continuous-disclosure rules to protect investors," she said.

But former Treasury Secretary Larry Summers said that Trump's proposal will have a negative effect on both companies and markets. "Students don't like grades and many business leaders don't like quarterly earnings reports," he wrote on X, formerly Twitter, on Tuesday, noting that the reason is the same. "Being monitored and accountable for results is painful."

"The President's idea of eliminating quarterly reports will cause companies and the markets to function less well," Summers added.

Claudia Assis contributed.

-James Rogers

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09-16-25 0826ET

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