Categories LATEST, U.S. Markets News

After Buffett and Dimon, Trump pushes to end quarterly results

Earlier in June, two Wall Street veterans had lambasted the practice of announcing quarterly results, stating it would hinder the long-term goals of companies. Berkshire Hathaway (BRK.A) CEO Warren Buffett and JPMorgan Chase (JPM) chief Jamie Dimon also started an initiative, backed by a few other CEOs, to draft a document of voluntary governance guidelines that make quarterly announcements optional.

On Friday, investors were greeted by President Donald Trump’s tweet that said he has asked the Securities and Exchange Commission (SEC) to study the possibility of transitioning into half-yearly results, instead of quarterly results, for public companies.

Related: If Buffett has his way, quarterly guidance will soon become history

Trump said, following discussions with “business leaders,” he has come to the conclusion that a shift to half-yearly results would create more employment and enhance business performance.

While on one side such a move would make investment decisions cumbersome, on the other, it would take off the burden that companies have to meet the short-term targets set by analysts. Since stock movements are directly linked to the quarterly performance, executives are often tempted to operate against their long-term goals. Or as Dimon stated, quarterly earnings intrude into the management’s business strategy.

There is also an emerging trend where activist investors are putting pressure on companies to meet earnings expectations.

Investors unhappy

Meanwhile, many investors are irked by Trump’s move, stating that quarterly results are key to maintaining transparency and accountability in the trading environment. Many investors also expressed hope that the SEC would not give a green signal to such a shift.

Related: Donald Trump’s ultimate boycott list

Most Popular

What to look for when CVS Health (CVS) reports Q3 earnings

Healthcare company CVS Health Corporation (NYSE: CVS) is all set to report earnings next week, with Wall Street expecting a mixed outcome. The company has been facing challenges in certain

eBay (EBAY): A few factors that helped drive growth in Q3 2024

Shares of eBay Inc. (NASDAQ: EBAY) stayed green on Friday. The stock has gained 32% year-to-date. The ecommerce leader delivered revenue and earnings growth for the third quarter of 2024,

CVX Earnings: Chevron reports lower revenue and profit for Q3 2024

Energy exploration company Chevron Corporation (NYSE: CVX) on Friday announced third-quarter 2024 financial results, reporting a decline in net profit and revenues. Net income attributable to Chevron Corporation dropped to

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top