After Months of Obscurity, Some CEOs Tiptoe Back Into Forecasts

01 Aug 2020, 06:20 AM IST

(Bloomberg) -- After the chaos and uncertainty of the early months of the Covid-19 crisis compelled dozens of companies to abandon their forecasts, things may be slowly coming back into focus.

Earnings guidance is making a comeback in the latest round of quarterly reports, with some in Corporate America and globally even saying that the worst of the coronavirus pandemic is behind them.

Infection rates are way down in parts of the U.S., including global financial center New York, easing lockdowns and allowing many businesses to reopen. This has allowed some companies to develop a clearer view of what lies ahead, and led a few to conclude that the second-quarter’s record-breaking economic contraction was as bad as things will get.

Still, not everyone is so confident, especially given the coronavirus spikes in some regions. Only about 20% of companies that usually provide financial guidance during earnings season have done so this time around. With more than half the firms in the S&P 500 reporting, profits have tumbled by about 34% from a year ago.

Here are some of the companies that have reintroduced or reported adjusted forecasts over the past few weeks:

Altria Group Inc.: Re-established forecasts by releasing full-year adjusted earning per share and capex figures after getting a “better understanding of Covid-19 impacts.”
AT&T Inc.: Provided limited guidance ––a small win for investors –- saying that the dividend-to-free-cash-flow ratio would be at the low end of the 60% range it had previously targeted. It also said capital spending for the year was going to be about $20 billion compared to $19.6 billion in 2019.
Boston Beer Co.: The 40% increase in second-quarter shipments over the prior year emboldened management to to reinstate full-year guidance for EPS to grow by as much 39% from 2019.
DexCom Inc.: The company reinstated its 2020 outlook for revenue, gross profit, operating margin, and adjusted Ebitda margin after topping consensus estimates with second-quarter revenue of $451.8 million.
Dover Corp.: CEO Richard Tobin said the company will reinstate annual guidance “As a result of our improved demand visibility into the third quarter, and our solid margin performance year-to-date.” Tobin said there it has a wider range in the guidance for the mid-year, “reflecting the fluidity of market conditions.”
DSV Panalpina: Reintroduced a 2020 outlook for Ebit before special item and its guidance beat the average analyst estimate.
Gecina SA: The real estate investment company reinstated recurring net income guidance of 5.55 to 5.70 euros a share.
Hershey Co.: Expects accelerated sales growth in the second half of the year based on the momentum it saw exiting the second quarter but refrained from bringing new fiscal 2020 guidance at this time.
Kimberly-Clark Corp.: CEO Michael Hsu stopped short of dismissing uncertainty ahead, but organic sales projections of 4% to 5% back up the company’s prior remarks of being equipped to weather the economic storm.
- The company said while “the environment remains uncertain, visibility has improved from three months ago.”
Medpace Holdings Inc.: The company’s second-quarter revenue and reinstated annual EPS outlook beat the highest analyst estimates.
Option Care Health Inc.: The company reinstated guidance for 2020, expecting to generate $200 million to $210 million in adjusted Ebitda.
PG&E Corp.: The company issued guidance for the remainder of the year, as well as 2021. PG&E expects a full-year loss of 99 cents to $1.05 share after losing $3.73 a share in the second quarter. It said it anticipates earnings of as much as 29 cents in 2021.
Philip Morris International Inc.: Cited “improving visibility on the trajectory of our business for the remainder of the year” and brought its guidance back for the year.
Quest Diagnostics Inc.: The clinical laboratory company reinstated its EPS guidance above its previous floor of $6.60, after topping quarterly earnings estimates with stronger-than-expected recovery from non-Covid-19 testing volumes and growing demand for Covid-19 tests.