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SEC proposal would shift some earnings reporting from quarterly to semi-annual
Bloomberg’s analysis of S&P 1500 companies going back to 2010 suggests revenue declines in a given quarter could be masked at twice the rate when only semi-annual results are shown.
The SEC has proposed allowing some companies to report earnings semi-annually instead of quarterly, a change that could reduce how clearly investors see negative quarterly performance, according to an analysis cited by Yahoo Finance.
The proposal would mean weaker quarters, such as those where revenue declines by at least 5%, are more likely to be obscured within positive semi-annual reporting, Bloomberg’s analysis of S&P 1500 companies found, based on data going back to 2010.
Yahoo Finance also notes that the SEC’s plan attracted about 200,000 public comments, with research cited from an Ohio State University accounting professor finding that roughly 99.5% of those comments were negative.
Critics argue the move would cut transparency and could increase volatility, while some proponents say semi-annual reporting would lessen companies’ paperwork burden and shift focus away from seasonal results, and a wealth planning founder warned it could disadvantage retail investors relative to institutions.