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Should Companies Abandon Quarterly Earnings Reports?
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Should Companies Abandon Quarterly Earnings Reports?

Knowledge at Wharton·@HashtagPLUS·about 1 month ago
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In a tweet on Aug. 17, U.S. President Donald Trump announced that he has asked the Securities and Exchange Commission (SEC) to study whether it makes sense for publicly held companies to publish half-yearly earnings reports instead of the current quarterly mode. That switch would allow companies “greater flexibility” and would save money, he argued. Trump later told reporters that PepsiCo CEO Indra Nooyi suggested the switch. Nooyi, who is set to leave PepsiCo in October, told Reuters that her comments were made in a broader context — reorienting U.S. companies to have a longer-term view of their businesses and “to explore the harmonization of the European system and the U.S. system of financial reporting.” According to experts at Wharton and Georgetown University, switching to semi-annual reporting could have significant downsides, including a greater temptation for companies to cover up missteps and an increased potential for insider trading.…

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