More Than 40% Of The S&P 500 Companies Rejected Forecasts Due To The Coronavirus
More than 40% of companies in the SP 500 index have withdrawn quarterly or annual forecasts due to uncertainty over the coronavirus outbreak.
As of June 25, their number was 218, according to data from Dow Jones Newswire. Some of them point to the likelihood of new outbreaks, changes in consumer behavior, and additional costs as reasons for their decision.
As noted by the Wall Street Journal, shares of companies that made this decision have fallen by 18.2% since the beginning of the year, while the value of the S&P 500 has fallen by 6.9%.
Many of the companies that have withdrawn forecasts represent the industries most affected by the pandemic. The largest share of organizations that withdrew forecasts was recorded in the telecommunications, entertainment, automotive, and industrial goods sectors, according to data from Dow Jones Newswires from January 15 to June 25. Among utilities and financial services companies, energy companies, and the media, their share was the smallest.
Quotes from cruise operator Norwegian Cruise Line Holdings Ltd. have fallen by almost 71% since the beginning of the year, amid the cancellation of cruises until at least the autumn.
"Given the rapidly changing impact of the pandemic, we cannot accurately assess its impact on our business or financial and operating results in the long term," cruise operator chief Executive mark Kempa said last month during a conference call after the report was published.
At the same time, among the companies that withdrew forecasts, there are also those who benefited from the consequences of the pandemic, including the supermarket chain Kroger Co., whose sales jumped. And the capitalization has increased by almost 13% since the beginning of the year.
The PayPal Holdings Inc. payment system has gained 58% in price over this period due to the growth of online trading. The company's chief financial officer, John Rainey, said in may that PayPal could not provide a reliable forecast in a rapidly changing situation. He stressed that " people will not live like this all the time."
Uncertainty is also associated with the cancellation of quarantine measures in the United States. Texas and Florida restored some restrictions last week due to a jump in new cases.
Some companies in the S&P 500 updated their forecasts due to the coronavirus outbreak: 154 companies lowered expectations on at least some indicators, while 28 improved their forecasts.