US Firms Expected to Stick With Quarterly Earnings
Investors warn that shifting to semiannual reporting could hurt valuations and increase volatility. Most firms plan to keep frequent updates to satisfy market demand.
The United States Securities and Exchange Commission (SEC) is preparing to formally solicit public feedback on a proposal that would eliminate the mandatory quarterly earnings reporting requirement for publicly traded firms. While the plan aims to reduce administrative burdens and encourage long-term strategic focus, many market participants suggest that the majority of established companies will likely maintain their current reporting schedules to avoid negative impacts on their valuations.
Proponents of the shift to semiannual reporting argue that the move could help reverse the decline in the number of public companies, which has dropped from a peak of approximately 8,800 in the late 1990s to roughly 4,200 today. However, active investment managers warn that a reduction in transparency could lead to a significant backlash from the financial community.
