The number of global cases of the coronavirus that causes COVID-19 moved further atop the 2 million mark on Thursday, as European leaders began to tentatively ease restrictions on movement and President Donald Trump promised guidelines for states on coming out of lockdown.
“The data suggests that nationwide we have passed the peak on new cases,” Trump said during a briefing Wednesday at the White House, although not all governors agree, and health experts have said too few tests have been conducted to create confidence that the worst is over.
Americans continued to file for unemployment benefits in droves, driving the number of virus-related layoffs above 21 million in a single month, numbers not seen since the Great Depression. Washington and the states have sought desperately to ease the burden and stabilize the situation with trillions of dollars in extra benefits for families, workers and companies.
The U.S. is already in recession, economists say, and likely to remain so for the next several months and perhaps longer if COVID-19 continues to spread or re-emerges in fresh hot spots. And it may be a year or longer before the economy is on sound footing — assuming a cure or treatment is discovered.
New York Gov. Andrew Cuomo outlined plans for a phased reopening of the Empire State at press briefings this week during which he underlined the importance and necessity of testing as the only way to be sure that people are no longer a risk to infect others and are immune to becoming reinfected themselves.
But with the need to bring testing up to scale rapidly, Cuomo called on the federal government to step up. New York has tested about 500,000 people so far, but by Cuomo’s estimates it will need to pump that up fast given that New York state has 19 million inhabitants.
Cuomo also said restarting the economy of his state would happen in several phases, starting with most essential businesses and gradually adding. The real end of the pandemic will only come when a vaccine has been developed, said Cuomo, and it’s estimated that could take 12 to 18 months.
There are now 2.08 million cases of COVID-19 globally, and 138,487 people have died, according to data aggregated by Johns Hopkins University. The U.S. has the most cases at 639,733 and the most deaths at 30,990. New York remains the U.S. epicenter with more than 200,000 cases and at least 10,834 deaths.
In Europe, Spain has the most cases at 182,816, with 19,130 deaths. Italy has 165,155 cases and 21,645 deaths, the worst death toll on the continent.
Germany has 134,753 cases and 3,804 deaths, while neighboring France has 134,598 cases and 17,188 deaths. The U.K. has 99,516 cases and 12,894 deaths. China, where the illness was first reported late last year, has 83,402 cases and 3,346 deaths, although numerous experts have said China is understating its tallies.
In medical news, Inovio Pharmaceuticals Inc. US:INO received an additional $6.9 million to fund a Phase 1/2 clinical trial of its COVID-19 vaccine candidate in South Korea. The funding came from the Coalition for Epidemic Preparedness Innovations (CEPI), an Oslo-based organization that has provided funding to vaccine makers during the pandemic. The trial will be conducted at the same time that a Phase 1 trial in the U.S. is already underway for the same vaccine candidate in the U.S. The company had received a $9 million grant from CEPI in January for vaccine development efforts in the early days of the COVID-19 outbreak in China.
Abbott Laboratories US:ABT beat consensus estimates for profit and revenue in its latest quarter. Sales in its nutrition and medical-devices businesses increased by 6.3% to $1.9 billion in nutrition (driven in part by increased consumer purchases of pediatric nutrition products in advance of shelter-in-place orders in the U.S.) and by 1.4% to $2.9 billion in devices (due to fewer sales of cardiovascular and neuromodulation devices in hospitals where those procedures slowed or were put on hold). Sales of diagnostics fell 0.8% to $1.8 billion as the unit reported lower routine testing volume as a result of the pandemic.
Other companies outlined their latest measures to combat the impact of the virus, including cutting pay, suspending share buybacks, cutting spending and withdrawing guidance.
Here’s what some of those companies said about COVID-19 on Thursday:
• Alphabet Inc. US:GOOG US:GOOGL is planning to slow down its hiring for the remainder of 2020 due to the COVID-19 pandemic. “We’ll be slowing down the pace of hiring, while maintaining momentum in a small number of strategic areas, and onboarding the many people who’ve been hired but haven’t started yet,” the company said in a statement.
• Amazon.com Inc. US:AMZN is working toward “regular” testing all of its employees for the COVID-19 virus, including those who aren’t showing any symptoms. Chief Executive Jeff Bezos said in a letter to shareholders that the company has started work on building testing capacity. “We are not sure how far we will get in the relevant time frame, but we think it’s worth trying, and we stand ready to share anything we learn,” he said. Separately, The Wall Street Journal reported Amazon would cancel Mother’s Day and Father’s Day promotions on its website, among other steps the e-commerce giant is taking to reduce stress on its network amid a surge in orders for essential items needed to ride out the pandemic.
• Outback Steakhouse parent Bloomin’ Brands Inc. US:BLMN has not terminated or furloughed any workers during the COVID-19 pandemic and has continued to pay hourly workers and offer them free meals. “We hope to be able to continue providing these benefits and will reassess our ability to do so every two weeks,” Chief Executive David Deno said in a statement. “In addition, I have suspended my salary, and the Board of Directors has suspended their cash retainers.” The company, which also operates Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse and Wine Bar, has grown sales each week since pivoting to off-premise sales only on March 20. It has stopped all nonessential spending, cut marketing costs and deferred nearly all capital spending. Combined U.S. same-restaurant sales fell 10.4% in the first quarter, Deno said, although off-premise sales at all of its chains have risen week by week. The company had about $304 million in cash on hand as of April 15, and expects its ongoing weekly cash burn rate to be about $8 million to $10 million at recent sales levels.
• Costco Wholesale Corp.’s US:COST board is hiking the company’s dividend by 8% to 70 cents a share from 65 cents a share. The dividend is payable May 15 to shareholders of record as of May 1.
• Goodyear Tire & Rubber & Co. US:GT warned of a sales miss, suspended its dividend and announced payroll cost cuts that will affect more than 9,000 employees. The company expects first-quarter sales to fall to $3.0 billion from $3.6 billion, compared with the FactSet consensus of $3.3 billion, as tire unit volume has dropped 18% to 31 million. The results reflect “significant declines” in shipments after auto makers halted production amid the COVID-19 pandemic, and weak tire replacement demand. Goodyear will save $37 million a quarter by suspending its dividend, which was last paid at 16 cents a share in January. The payroll cost cuts include furloughs, temporary salary reductions and salary deferrals. The company is also evaluating ways to accelerate restructuring action. Separately, Goodyear refinanced its $2 billion revolving credit facility to extend the maturity to 2025
• Greenbrier Companies Inc. US:GBX has laid off 3,700 people, or more than 20% of its workforce this fiscal year, because of the economic impacts of the COVID-19 pandemic. The railroad car maker has suspended production of rail cars at its flagship Gunderson facility in Portland, Oregon, citing a surplus of intermodal units in the North American rail fleet and declining rail loadings. The suspension of production will affect about 200 employees. The company said its marine operations at Gunderson will continue at full strength.
• Harley-Davidson Inc. US:HOG has furloughed most of its global production employees and is cutting salaries for most other salaried employees in the U.S. The salary cuts are in the order of 10% to 20%, with no merit increases for 2020. The company had about 5,000 employees in its motorcycles segment as of Dec. 31, with about 2,000 unionized employees at U.S. manufacturing facilities, while the financial services segment had about 600 employees. Harley said Chief Executive Jochen Zeitz was forgoing his salary, while salaries of other executives were being reduced by 30%.
• Hilton Grand Vacations Inc.’s US:HGV board has adopted a one-year shareholder rights plan effective April 16, to block a potential takeover of the company following a steep selloff in its shares. “The adoption of the one-year Rights Plan will protect against parties seeking to take advantage of the current market environment to the detriment of HGV and its shareholders,” Chairman Leonard Potter said in a statement. A rights plan, also known as a poison pill, is a common way for companies to avoid a person or group taking advantage of a low share price. Hilton’s stock has fallen 50% since end January amid market volatility.
• Hilton Worldwide Holdings Inc. US:HLT has suspended operations at nearly 1,000 hotels, or at about 16% of its global hotels. The company expects first-quarter revenue per available room to fall 22% to 24% from a year ago, which includes a 1% increase in January, a 4% decline in February and a 56% to 58% drop in March. Hilton expects “material declines” to earnings and overall results. Among actions taken, Hilton has suspended dividend payments and share repurchases, fully drawn on its $1.75 billion revolving credit facility and reduced payroll costs through furloughs and salary cuts. Based on its current cash position and the assumption that current low levels of occupancy persist, it can fund operations for the next 18 to 24 months.
• Jack in the Box Inc. US:JACK is withdrawing its 2020 guidance and projecting a quarterly same-store sales decrease of 4.2%. The company had minimal temporary closures and is operating in an “off-premise” capacity. Jack in the Box has paused its share repurchase program and it expects to report $165 million in cash at the end of the second quarter.
• Sam’s Club, a unit of Walmart US:WMT, will reserve Sunday morning shopping hours between 8 a.m. and 10 a.m. for health-care workers and first responders. Those hours were previously reserved for Sam’s Club employees.
• United Airlines Holdings Inc. US:UAL expects to get about $5 billion in federal aid, of which about $3.5 billion will be a direct grant and about $1.5 billion will be a low-interest-rate loan. The money will be used to pay for the salaries and benefits of tens of thousands of United Airlines employees. In connection with strings attached to the program, the airline’s parent company expects to issue warrants to purchase about 4.6 million shares of common stock to the federal government. The $2 trillion coronavirus aid package signed into law last month included $25 billion in assistance for passenger airlines, and carriers and the Treasury Department struck a deal late Tuesday over the terms of the aid
• VF Corp.’s US:VFC Dickies global workwear brand will start to produce isolation gowns for health-care workers and hospitals across the U.S. starting next week. The company, which also owns the Vans and North Face brands, is expecting to deliver an initial batch of 50,000 gowns in May, and to expand capacity to produce up to 675,000 gowns by June and up to 3.4 million by September. The gowns will be made using fabric supplied by Milliken & Co. in compliance with U.S. Food and Drug Administration guidelines. Dickies pointed to its history of helping out in crises and said it made millions of uniforms for the U.S. military during World War II.
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