Uncertainty is certain for most companies
The most active week of the earnings season is on and the rush of quarterly reports Tuesday, 39 in all, captured the maneuvering of companies from almost every sector as they feel their way through an unprecedented economic shockwave.
• Alphabet, the parent company of Google, reported a 3 percent increase in profit in the quarter that ended in March but warned that there was a significant slowdown in advertising spending during the final month as the coronavirus started to spread in the United States. Revenue rose 13 percent in the first quarter to $41.2 billion, exceeding projections from Wall Street analysts.
• PepsiCo reported strong earnings in the first quarter as consumers stocked up snacks and beverages for the Super Bowl and, later, the coronavirus quarantines. PepsiCo said net sales in the quarter rose 7.7 percent to $13.88 billion with its snack, beverages and food divisions all seeing robust sales. Other companies have suspended share buybacks or dividends to shareholders because of the effect of the pandemic, but PepsiCo said it intended to repurchase $2 billion in shares and provide $5.5 billion in dividends.
• Southwest Airlines posted its first quarterly loss Tuesday in almost a decade. Southwest lost $94 million in the first quarter of
the year, a relatively light blow in an industry ravaged by the coronavirus pandemic. Delta, the biggest and most profitable U.S. airline, posted its its first quarterly loss in five years last week. Few expect a profitable year. More anticipate a smaller industry, and soon, with furloughs already underway.
• BP said Tuesday that profit for the first quarter fell by twothirds compared with a year earlier. The London-based oil giant said that “underlying replacement cost profit,” the metric most closely followed by analysts, was $791 million for the quarter, down from $2.36 billion a year earlier. The company reported a $4.4 billion loss for the period, mostly because of a $3.7 billion inventory loss on holdings of oil.
• United Parcel Service
reported $18 billion in revenue in the first quarter of the year, 5 percent more than in the same period last year. Still, earnings per share missed forecasts, and the company warned that disrupted supply chains had taken a toll on its customers and withdrew its forecasts for the rest of the year.
• 3M: Sales and profits increased at 3M in the first three months of the year as demand surged for face masks and other personal protective equipment. Global sales grew 21 percent in its health care division, while consumer sales went up 4.6 percent, the company said Tuesday. 3M said it would begin reporting sales every month, even as it withdrew full-year financial forecasts it had made in late January.
• Harley-Davidson on Tuesday reported a steep drop in retail sales of motorcycles in the first quarter. In the United States, sales were up 6.6 percent until mid-March, and then ended the quarter 15.5 percent below the same period last year, the company said.
• Ford Motor Co. posted a $2 billion first-quarter net loss, blaming nearly all of it on the negative effects of the coronavirus. The automaker said Tuesday that its revenue from January through March fell nearly 15 percent to $34.3 billion as most of its factories were shut down for the final week of the quarter.
Some companies have announced plans to restart factories but Ford, General Motors and Fiat Chrysler still are negotiating a date with the United Auto Workers union.
• Pfizer on Tuesday said the pandemic is disrupting its patient testing of experimental drugs and that will reduce revenue significantly this quarter.
The outbreak increased sales of Merck & Co. medicines during the first quarter as households around the world stocked up, but the drugmaker expects a significant hit in the second quarter as the full force of the outbreak lands. Merck said Tuesday that it anticipates 2020 prescription drug sales will fall by $1.7 billion because the outbreak is keeping many patients with chronic conditions away from their doctors.