It was perhaps the most sensible tweet of Donald Trump’s presidency so far. The US president’s call on Friday for the Securities and Exchange Commission (SEC) to study ending quarterly earnings reporting and shifting to a six-month system is eminently worthwhile. Yet the central issue is not how often earnings reports are, but what they involve. US quarterly earnings seasons have certainly become a noisy, time-consuming and costly circus, in which companies, analysts, investors and financial media all participate. They also have elements of a game. Companies can massage expectations, then the numbers themselves — by adjusting when they book revenues or costs — to try to meet or beat forecasts. The wider concern is that quarterly reporting fosters a short-termist culture across corporate management and the investment community. Longer-term capital spending may be skipped if it would damage quarterly numbers. CEOs can become obsessed with ensuring constant quarter-on-quarter improveme...

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