Reporting results may boost stocks

NEW YORK (AP) – Quarterly earnings announcements look more than ever like prize fights: hyped events that often leave the pugilists battered and the fans drained.

Take Google Inc. Its stock climbed almost $14.40 in the four days before its Thursday earnings announcement. But after it said profits had quadrupled, the stock fell $21.19 to $292.75 in extended trading because it forecast a slower third quarter.

Or consider Molina Healthcare Inc. After Molina warned it would report a second-quarter loss and reduced its full-year earnings, traders lopped $20 off its stock price, which closed at $26 a share.

Many stock watchers think there’s a better way for companies to communicate with their investors: more frequently. They say companies should report financial results monthly or even daily. More information would make stocks less volatile and managers would have a harder time gaming their results.

Steven Wallman, who was a commissioner at the Securities and Exchange Commission from 1994 to 1997, says companies could easily post real-time information on the Web using the technology most already employ to track finances.

“The markets are real time,” said Wallman. “If you’re getting something every day, what it is at the quarter becomes a much less relevant notion. … It’s one way to eliminate the shortsightedness that seems to be creeping into the market.”