TSN Tyson Foods

By Allison Prang 

The weakest earnings season in more than a decade continues, with nearly 150 companies in the S&P 500 expected to report quarterly results this week, including big names in media and food.

More than half of the S&P have already logged their results for the first three months of 2020, according to FactSet, and earnings are projected to fall 13.7%, year over year, as companies detail the impact of the coronavirus pandemic on their operations. The estimate, based on those companies that have already reported and forecasts for those to come, would mark the largest such quarterly decline in earnings since the third quarter of 2009, FactSet said.

Revenue growth is holding up better, projected to grow 0.7% year over year, said FactSet, which forecasts 148 companies in the S&P 500 giving quarterly updates this week.

Among the big names expected to report this week are Walt Disney Co., General Motors Co., Tyson Foods Inc. and CVS Health Corp.

Disney reports its financial results after the market closes Tuesday. Nearly every corner of Disney has been rocked by the pandemic, and its profitable parks division was effectively shut down in the midst of calls for people to practice social distancing.

The pandemic is seen benefiting the company's streaming platform, Disney+, because consumers were trapped indoors. Several of the biggest releases headed to the platform, however, have had production halted during the new coronavirus outbreak. As a result, Disney has moved some theatrical releases to the streaming service ahead of schedule.

ViacomCBS Inc., which has its own streaming services, reports on Thursday. The question for video-streaming services is whether consumers will keep paying for those offerings after the pandemic subsides, said John Janedis, managing director at Wolfe Research.

Netflix Inc. Chief Executive Reed Hastings said last month that his company's surge in streaming-video subscribers in the first quarter may mean smaller growth later in the year, but he couldn't say for sure.

"Our guess is that subs will be light in [the second half] relative to prior years because of that," Mr. Hastings said. "But we don't use the words guess and guesswork lightly. We use them because it's a bunch of us feeling the wind."

Tyson Foods, which is among meat processors that have closed plants because of the pandemic, reports results Monday. The plant closures sparked an oversupply of pigs, which has spurred the industry to consider euthanizing the animals. President Trump signed an executive order to let meat companies operate during the pandemic.

Beyond Meat Inc., known for its alternative meat products, reports results Tuesday. The stock has been on a strong run over the past month, up 58%, in the midst of concern about meat supply in the U.S. and the company's recent expansion into China.

The coronavirus pandemic has curtailed car sales and halted vehicle production around the country. Detroit auto makers are looking at starting production again May 18, and General Motors gives its quarterly update Wednesday.

Health-care companies are on track to report the highest year-over-year growth in revenue among the 11 S&P 500 sectors and are tied with consumer staples on earnings growth, FactSet said. CVS Health will detail the pandemic's impact on its operations Wednesday.

The company's stores suffered product shortages like other retailers, Chief Executive Larry Merlo said in March, and he said that it was too soon then to tell how the pandemic would affect the company's insurance operations. The pharmacy company acquired health insurer Aetna Inc. for nearly $70 billion in 2018, and it owns Caremark, one of the country's largest pharmacy-benefits managers.

Energy is among the sectors reporting a year-over-year decline in earnings, and more energy companies are scheduled to report this week, including Marathon Petroleum Corp., Marathon Oil Corp. and Occidental Petroleum Corp.

Those results follow Exxon Mobil Corp., which reported its first loss in decades last week, and Chevron Corp., which on Friday announced more cuts to its capital-spending plans this year. The companies painted a dismal picture of the oil industry, signaling that the impact of the coronavirus pandemic may hang over their businesses for much of 2020.

Write to Allison Prang at allison.prang@wsj.com

(END) Dow Jones Newswires

May 03, 2020 07:14 ET (11:14 GMT)

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