Stacey Vanek-Smith

This might sound dramatic, but it really can be a crisis.

Take Target.

Last year, the retailer's quarterly sales came in at $25.7 billion instead of the expected $25.9 billion.

Investors panicked, and Target's stock lost almost a quarter of its value in one day.

So it's maybe not surprising that companies will scramble to make sure that they hit Wall Street's guesstimate.

Campbell Harvey is a professor of finance at Duke's Business School.

He was part of a team that looked into how mandated quarterly earnings impact how companies are run.

They surveyed hundreds of CFOs.

Among the questions, have you ever delayed a project to meet quarterly earnings expectations, even though that meant sacrificing shareholder value?

Harvey says companies do all kinds of costly acrobatics to hit these numbers.

And that three-month merry-go-round?

It's bad for companies.

Right?

Like, why couldn't you just get on an earnings call and explain?

You know, like, we've launched this big new project, and that is why we missed earnings expectations by a nickel.

Logic does not run the show on Wall Street.

And that is why Harvey is glad to see President Trump taking this up.

And now the head of the Securities and Exchange Commission has announced plans to move to a system where public companies open their books just twice a year.

Many countries actually do this.

The U.K., much of Europe.