Is Ending Quarterly Earnings a Risk Worth Taking?

US President Donald Trump has called for U.S. public companies to move from quarterly to semiannual earnings reporting. He argues that fewer reporting requirements would reduce regulatory burdens and allow corporate leaders to focus on long-term strategies. The Securities and Exchange Commission (SEC), under Chair Gary Gensler, has been tasked with reviewing this proposal, a sign that the debate is more than political theater—it touches on the foundations of U.S. market transparency and governance.

The Argument for Fewer Reports

Supporters of the change believe quarterly reporting traps companies in a cycle of short-termism. Under pressure to meet expectations every three months, executives often make decisions designed to boost short-term numbers rather than long-term growth. Advocates suggest that a six-month reporting cycle could free firms to invest in innovation, research, and workforce development without the constant glare of Wall Street.

Transparency at Stake

Yet financial markets thrive on information. Reducing the frequency of disclosures risks widening the information gap between insiders and ordinary investors, leaving smaller shareholders at a disadvantage. U.S. capital markets have earned global credibility in large part because of their transparency. Treasury Secretary Janet Yellen has underlined that investor protections must not be compromised, pointing to the delicate balance between regulatory reform and market trust. If transparency weakens, confidence in U.S. markets could erode, making it harder to attract global investment.

What History Suggests

Experiments in Europe with less frequent reporting have shown a mixed picture. While regulations were eased, many companies continued to release quarterly updates voluntarily, recognizing that shareholders demand frequent information. A similar outcome in the U.S. is likely. Even if the SEC grants flexibility, competitive pressures and the need to maintain investor confidence may keep the quarterly rhythm alive.

Why It Matters for Investors

For investors, the stakes are significant. Longer reporting gaps mean earnings surprises could trigger sharper price swings. This environment could also increase reliance on alternative and less standardized data sources. Investors and traders would need to exercise heightened caution, paying close attention to broader policy signals and market developments. Ultimately, the U.S. faces a fundamental question: should it risk loosening one of its strongest safeguards—regular transparency—to reduce corporate burdens, or does the credibility of its markets rest on maintaining that steady flow of information?