Companies pull guidance as COVID-19 chaos reigns

Equities

A slew of leading US companies have pulled their guidance today, blaming the uncertainty caused by the coronavirus outbreak. What else do the latest earnings reports tell us about the stocks?

Chipotle

Chipotle beat earnings estimates by $0.18 after reporting earnings per share of $3.08 for the first quarter. Revenue clocked in around expectations at $1.41 billion, as a surge in online orders helped to soften the blow from the closure of around 100 restaurants in locations such as shopping centres.

Despite pulling its guidance, the company has announced plans to help it adapt to the changing conditions, which include improving its mobile app, partnering with more delivery companies (and making delivery free), and shifting ad spend from live sports events to online, such as streaming platforms.

Executives have also said that diminished competition for real estate is helping the company secure better sites for future restaurants, even as it delays work on some of the 165-odd locations it had planned to open this year.

Shares are up around 10%.

AT&T

Shares in AT&T are drifting lower today after the company’s latest earnings report. Not only did the company pull its guidance, it also missed EPS expectations by a cent and reported revenue of $42.8 billion against forecasts of $44.2 billion.

The first quarter saw a surge in new phone subscribers, despite over 40% of its retail stores having to shut. Premium TV subscribers slumped by 897,000. The company estimates that the pandemic has hit EBITDA by $435 million.

Although guidance is out of the window, the company stated that it has enough free cash flow to make its debt payments and to pay dividends.

Quest Diagnostics

Quest Diagnostics has jumped 4% today after the company said that it had begun testing in its medical labs for COVID-19 antibodies, using tests from Abbot Laboratories and PerkinElmer. Earnings came in 5 cents above expectations, but revenue was 3.6% lower at $1.82 billion. The company expects to be able to perform over 200,000 antibody tests per day by the middle of next month. While guidance has been pulled, dividends are unaffected.

Kimberly-Clark

Earnings for Kimberly-Clark came in well-above expectations at $2.13 per share, versus consensus expectations of $1.97. Revenue was up as well, topping $5 billion against expectations of $4.86 billion, as consumers stocking up on essential items pushed organic sales up 11%.

The stock has slipped around 1% lower today.

LYFT

Lyft earnings aren’t due until May 6th, but the company has already followed its larger rival Uber in pulling its 2020 guidance. The company had been aiming to finally turn profitable this year, but the coronavirus pandemic has crushed those forecasts. Driver bookings are down around 75% in recent weeks.

‘The pandemic began to have a negative impact on business trends, including ride volumes, in mid-March, which has continued into April,’ Lyft said yesterday.

The May 6th earnings will detail the measures the company is taking to safeguard its financial position and reduce costs, while supporting both drivers and riders.