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Daimler Scraps Forecast, Hermes Reopens Stores: Earnings Wrap

imageStock Markets8 hours ago (Apr 23, 2020 02:54AM ET)

(C) Bloomberg. Employees wear protective face masks as they assemble Mercedes-Benz AG S-Class automobile M256 six cylinder motors in the automaker’s powertrain factory, operated by Daimler AG, as it reopens for business in Stuttgart, Germany, on Wednesday, April 22, 2020. The financial fallout from forced factory shutdowns aimed at minimizing contagion risks is set to trigger the deepest economic crisis since World War II. Photographer: Alex Kraus/Bloomberg

(Bloomberg) — Unilever (LON:ULVR) joined carmakers in saying it couldn’t predict the future as the pandemic skews everything from production to sales.

Daimler AG (DE:DAIGn) threw out a forecast made two months ago that estimated significantly higher profit this year while Renault SA (PA:RENA) said it’s still not possible to assess the virus’s impact. Those calls echoed earlier warnings from Volkswagen (DE:VOWG_p) AG, which also scrapped its outlook this month. French automaker PSA Group has forecast a steep decline in the European car market.

Unilever reported flat sales as people stockpiled staples but often couldn’t go out for ice cream. Still, the Ben & Jerry’s maker maintained its quarterly dividend. Hermes said it has reopened all of its mainland China stores, preparing for rebounding demand as the country emerges from lockdown.

Key Developments:

  • European stock-index futures are indicating a slightly higher open, with Euro Stoxx 50 futures up 0.5%
  • Daimler Scraps Hope for Higher Profit as Crisis Clouds 2020 View
  • Unilever Withdraws Guidance After Coronavirus Flattens Sales
  • For more on dividends, click here. For the latest company guidance, click here.
  • German Cases Up; French Business Confidence Sinks: Virus Update

Here’s the top virus-related earnings news for today by sector.

Autos

  • Daimler abandoned a forecast it made only two months ago for higher annual profit and said the pandemic makes it difficult to assess how much earnings will fall this year. The Mercedes-Benz maker now expects 2020 earnings will be lower than 2019 after reporting a 78% drop in first-quarter profit.
  • Renault’s first-quarter sales plunged and the French carmaker said it is impossible to judge the impact the virus will have on its results. Revenue dropped by 19% with unit sales in Europe falling by 36%, worse than the 26% decline for the wider market.
  • Swedish truck maker Volvo AB expects its service sales to take a hit from lower fleet utilization and with vehicles standing still as a result of lockdown restrictions. The truckmaker has seen more orders cancelled than received since the end of last month, when it closed down most of its factories, and lower truck usage has led to increased inventories of used trucks.

Consumer

  • Unilever withdrew its 2020 guidance and said underlying sales were flat in the first quarter. It saw a positive impact from customers stockpiling goods in March but said sales in China were hit hard by the Covid-19 lockdown in January and February. It is benefiting from strong sales of cleaning products like the Cif and Domestos brands. That’s being offset by weakness in products such as Ben & Jerry’s ice cream as consumers stay home.
  • Pernod Ricard (PA:PERP) SA, the largest seller of international spirits in China, suspended a planned share buyback of 500 million euros after the company reported that sales fell 14.5% on an organic basis during the third quarter of its fiscal year. The distiller reiterated a forecast that organic profit would fall by 20% this year.
  • Swedish toilet-roll maker Essity AB said its first-quarter adjusted profit surged by 70%. The group had already flagged the jump in profit earlier this month, boosted by consumers stockpiling its goods as the virus outbreak took hold.

Retail

  • Hermes International (PA:HRMS) reported a smaller decline in first-quarter sales than analysts expected and said it has reopened all of its mainland Chinese stores, preparing for a bounce back in demand after the coronavirus outbreak erased demand for luxury goods. Still, sales in the U.S. and Europe have ground to a halt, which will weigh on the second quarter.
  • Italian luxury outerwear firm Moncler SpA (MI:MONC) scrapped its dividend but reported first-quarter organic sales that were “marginally” ahead of expectations, according to Bernstein analysts. RBC said the firm’s liquidity is strong and there should not be material changes to estimates following the update.

Financials

  • Credit Suisse (SIX:CSGN) reported first-quarter net income ahead of expectations but its loan-loss provisions were more than double what analysts had expected. You can follow the live blog for Credit Suisse’s earnings here.
  • Swedbank AB reported a first-quarter loss owing to a jump in credit impairments and the cost of its money laundering scandal. The Swedish lender said it was participating in both the National Debt Office’s loan-guarantee program and the central bank’s loan facilities.

Travel & Leisure

  • French hotel operator Accor (PA:ACCP) SA said it expects April and May to be the most difficult months of the year, with “very low” occupancy rates and “strong uncertainty” about when lockdown measures will be loosened and borders reopened. The firm sees initial indications of a recovery in China and expects an improvement in the second half as confinement measures get progressively lifted, Chief Executive Officer Sebastien Bazin said on a call with journalists.
  • Swiss duty-free retailer Dufry AG said its first-quarter revenue fell 22%, with sales falling by around 56% in March as travel restrictions and airport closures began. In the first two weeks of April, sales have fallen 90% year-on-year.
  • Aeroports de Paris reported a decline in quarterly revenue marked by the first effects of the coronavirus pandemic, the scale and effects of which have “continuously amplified,” CEO Augustin de Romanet said.

Business Services

  • Catering giant Compass Group (LON:CPG) Plc said organic growth in the first half of its fiscal year met expectations but around 55% of its business is currently closed due to lockdowns.
  • Prepaid vouchers firm Edenred (PA:EDEN) said its revenue grew in the first three months but it anticipates a “marked decrease” in activity in the second quarter.

Industrials

  • Schneider Electric (PA:SCHN) SE saw some signs of recovery in China toward the end of the first quarter but it expects a significant impact on the first half from the pandemic.
  • Chemicals firm Croda International Plc said its first-quarter profit was broadly in line with expectations, though it has seen more variable conditions in some markets since the start of the second quarter.

TMT

  • French software group Dassault Systemes SE expects broadly stable 2020 earnings year-on-year but said the virus will hit global GDP and has placed restrictions on a number of industries it serves. The group cut its earnings outlook on April 1.
  • Payments firm Worldline SA expects its 2020 sales to be flat or lower, with second-quarter revenue to be “severely” hit by virus-related lockdowns. Ingenico Group SA, which Worldine is acquiring, also cut its 2020 revenue forecast on the effects of the pandemic.
  • German broadcaster ProSiebenSat.1 Media SE withdrew its 2020 earnings outlook on a lack of visibility created by the pandemic effects. It said trading across all its units will be hit in the second quarter, with core TV advertising revenue to fall 40% for April and investment in new programming to be cut.

Real Estate

  • U.K. home builder Taylor Wimpey (LON:TW) Plc plans to resume construction work in the week beginning May 4 after drafting guidelines on how to maintain social distancing. The company will continue to keep offices and marketing suites closed. It has managed to secure orders for about 200 new home remotely since the lock down was implemented, outweighing a slight increase in cancellations, it said.
    • Peer Vistry Group Plc also said it intends to restart work on a number of housing sites

Energy

  • Norwegian oil company Equinor ASA slashed its dividend by two-thirds. The group has already suspended its share buyback and outlined a $3 billion cost-cutting plan as it works to shore up its business against the historic crash in oil prices.

Market Strategy

  • The bottom for European stocks appears to be behind us, according to the latest Bloomberg equity index survey. The poll of strategists shows consensus remains relatively bullish, despite big cuts to the average price target for Europe’s benchmark Stoxx 600 index since the previous poll in March.

(C)2020 Bloomberg L.P.

Daimler Scraps Forecast, Hermes Reopens Stores: Earnings Wrap

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