Why is Del Monte Pacific Limited putting out Q1 results now?

The earnings report that Del Monte Pacific Limited [DELM 14.50 8.05%] posted on Friday isn’t some restatement of DELM’s Q1 earnings report as one might expect, considering that the deadline for Q2 quarterly reports has already passed. Instead, DELM is one of those companies that has elected to use a different reporting structure. The vast majority of companies on the PSE consider January to the end of March to be “Q1” of that fiscal year. with December 31 the “year-end” for the previous year.

DELM considers April 31st to be its year-end, and May to the end of July to be its “Q1”. Some companies select a non-standard fiscal year-end in order to better match a particular industry’s natural billing/revenue cycle (like a school system that runs August to May might start its fiscal year on August 1), or to soften the outsized negative impact of season capex spending. Whatever the reason a company may select a non-standard fiscal year-end,  the PSE doesn’t care so long as the company is consistent and timely.

MB BOTTOM-LINE

While companies are free to select weird year-ends, I don’t think that the market itself benefits too much from the staggered reporting that results from allowing non-standard reporting schedules. It would not be particularly investor-friendly if, for example, all of our banks had different fiscal year-ends; that would make comparing results between those companies much more difficult.

Thankfully, there seems to be a great deal of inertia for the December 31st year-end as a default setting, so we aren’t overrun by non-standard reporting schedules. Also, it tends to be that companies in the same industry tend to report at the same time, making the concern about hampered comparisons between companies more of an academic problem rather than a practical one. After all, out of nearly 300 companies on the PSE, there are only 15 companies with non-standard year-ends. That’s a pretty manageable minority. Though, out of those 15, DELM is the only one with a weird May-April fiscal year, and only one of two companies with a unique fiscal year on the PSE (the other is Island Information & Technology, Inc. [IS 0.14], with a November-October fiscal year).

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