The corporate earnings season in the United States appears to be drawing to a close.
The Securities and Exchange Commission (SEC, the American equivalent of the CVM) is preparing a proposal that would eliminate the requirement for companies to report their financial results quarterly, according to The Wall Street Journal (WSJ) .
The alternative being considered is to have companies publish their financial statements twice a year. Publishing quarterly financial statements would be optional.
According to the newspaper, regulators are expected to present a draft proposal in April, after having spoken with representatives from major stock exchanges to discuss possible adjustments to the rules.
The proposal will be subject to a 30-day public consultation period. After that, the SEC directors will vote on the final text, with no guarantee that the measure will be approved.
If passed, the proposal would align the United States with the United Kingdom and the European Union (EU) , where companies are required to submit semi-annual reports but are not required to issue quarterly reports.
The review gained momentum after the Long Term Stock Exchange (LTSE), an operator focused on long-term companies, requested the SEC to end quarterly earnings reports.
The idea has the support of Donald Trump . The President of the United States has already stated that companies should not be "forced to" disclose quarterly results, citing cost savings.
"Have you ever heard the saying that ' China has a 50- to 100-year vision in managing a company, while we run our companies on a quarterly basis'? That's not good!", Trump wrote last September on his Truth Social account.
Publicly traded companies in the United States have been releasing their earnings every three months for over 50 years. Proponents of ending the mandatory reporting argue that the measure could stimulate new IPOs – according to the WSJ , the number of publicly traded companies is half of its peak in the late 1990s.
Among the reasons companies cite for remaining private is the time-consuming and expensive administrative work required to list and maintain publicly traded shares, which includes closing financial statements quarterly.
Investor Warren Buffett and Jamie Dimon , CEO of JP Morgan , have already argued in a 2018 article in the WSJ for the end of quarterly guidance, claiming that it harms long-term planning.
"In our experience, quarterly earnings projections often lead to an excessive focus on short-term profits at the expense of long-term strategy, growth, and sustainability," they wrote at the time.
