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United Airlines cuts 80% of capacity, expects bigger reduction in May

4 hours ago

United Airlines Holdings Inc. shares fell in the extended session Friday after the airline announced huge capacity cuts and expects more to come. United shares fell 6% after hours, following a 2.3% decline to close the regular session at $22.89. In a filing with the Securities and Exchange Commission, United said it has cut about 80% of its capacity in April with even larger cuts expected in May. In the meantime, United said it will evaluate and cancel flights on a rolling 90-day basis until demand recovers. The airline said it is losing more than $100 million a day in revenue and that it expects fourth-quarter revenue to be down at least 30% from the year-ago period. Crain's Chicago Business reported late Friday that United has also filed for a federal grant in order to keep paying employees. United shares are down 74% for the year, while the S&P 500 index is down 23%.

Trump says CDC recommends that U.S. citizens wear cloth face masks -- but the president will not

4 hours ago

President Donald Trump on Friday evening said that the U.S. Centers for Disease Control and Prevention now recommends wearing cloth face masks, to help to slow the spread of COVID-19, the deadly infection that is derived from the new strain of coronavirus that has infected millions of people world-wide. Speaking at a daily White House briefing on Friday to address response to the pandemic, the president said that the CDC guidelines are voluntary. "You can do it," the president said, "you don't have to do it. It's only a recommendation," he added. Trump, however, said that he will not wear a mask. "I don't think i'm going to be doing it," he said.

Delta stock falls 7% as Buffett's Berkshire Hathaway sells some of its stake, airline expects worse Q2

4 hours ago

Shares of Delta Air Lines Inc. fell more than 8% in the extended session Friday after the airline said its second quarter will be "even more difficult than the first" and Warren Buffett's Berkshire Hathaway Inc. disclosed it sold chunks of Delta stock this week. Berkshire sold nearly 315 million shares on Wednesday and Thursday priced between $22.96 and $26.04, it said in a filing. Separately, Chief Executive Ed Bastian urged more employees to take extended leaves and said the company likely hasn't seen the bottom of the pandemic-related crisis. "This week we closed the books on the first quarter of 2020, and it was unlike any quarter in Delta's history," Bastian said in a memo to employees. The air carrier continued to see passenger volumes and revenues drop; in the past Saturday, it flew about 38,000 people, compared with a normal late-March Saturday around 600,000, he said. "Unfortunately, even as Delta is burning more than $60 million in cash every day, we know we still haven't seen the bottom," Bastian said. The company's April schedule will be about 80% smaller than planned, with 115,000 flights cancelled, Bastian said. Like other airlines, Delta said it submitted paperwork to benefit from government aid, but the funds alone "are not nearly enough" as Delta expects revenue to be down 90% for the second quarter. Without action, that money would be gone by June, he said. Delta asked employers to volunteer for unpaid leaves, including longer-term leave. The company also announced a 25% cut in hours for some employees, "essential to protecting Delta for the long term," the CEO said.

Global chip sales hampered as coronavirus spread in China

4 hours ago

Global chip sales momentum stalled in February due a falloff in demand from China as the COVID-19 pandemic spread, according to the Semiconductor Industry Association late Friday. While worldwide February sales rose 5% to $34.5 billion from a year ago, they declined 2.4% from January's sales of $35.4 billion, with sales from China falling 7.5% from January. "Global semiconductor sales in February were solid overall, outpacing sales from last February, but month-to-month demand in the China market slipped significantly and the full impact of the COVID-19 pandemic on the global market has yet to be captured in available sales numbers," said John Neuffer, SIA president and chief executive. The PHLX Semiconductor Index is down 22% for the year, while the S&P 500 index is off 23% and the tech-heavy Nasdaq Composite Index is down 18%.

SmileDirectClub to furlough workers in response to coronavirus

5 hours ago

SmileDirectClub Inc. said late Friday it will furlough much of its workforce in response to the COVID-19 pandemic. The teeth-straightening device company said it was extending closure of its retail stores, except those in Hong Kong, until at least May 3, and pulled its guidance for the year. Analysts surveyed by FactSet had forecast a full-year loss of 58 cents a share on revenue of $982.3 million. SmileDirectClub stock declined 0.5% after hours, following a 4.2% decline to finish the regular session at $3.88.

GNC, Vera Bradley furlough workers; Vera Bradley cuts 401(k) matches

5 hours ago

GNC Holdings Inc. and Vera Bradley Inc. were the latest retailers to announce furloughs and other measures to shore up their balance sheets amid store shutdowns caused by novel-coronavirus pandemic. GNC Holdings said late Friday it was temporarily furloughing a "significant portion" of its store and corporate employees. Those workers will maintain health benefits through at least this month, the retailer said. GNC put in place a hiring freeze and cut merit raises, among other cost-cutting moves across its businesses except digital, it said. Also late Friday, Vera Bradley said it would furlough most of its store employees and "certain" corporate employees effective Monday "until it is considered safe and advisable to reopen our stores." Some of the company's distribution-center employees were furloughed last week. "Our furloughed associates remain valued members of our Vera Bradley family, and we look forward to calling them back to work as soon as possible," the luggage and handbags retailer said. The employees on furlough will have benefits for up to 12 weeks, the company said. Vera Bradley is also reducing salaries, including a 75% pay cut for Chief Executive Rob Wallstrom, and temporarily cutting 401(k) company matches as well as charity donation matches, among other moves. Shares of Vera Bradley were flat in the after-hours session after ending the trading day down 2.1%

FDIC announces first bank failure of coronavirus crisis

5 hours ago

A small bank in West Virginia has become the first institution to fail during the coronavirus crisis, the Federal Deposit Insurance Corp. announced Friday. The First State Bank of Barboursville with $152 million in total assets was closed Friday by the West Virginia Division of Financial Institutions. The bank's $139.5 million in deposits will be acquired by MVB Bank Inc. of Fairmont, W.Va. The four branches of The First State Bank will reopen as branches of MVB Bank on Saturday, the FDIC said.

JetBlue is burning through $10 million a day: CEO

5 hours ago

JetBlue Airways Corp. is burning through $10 million a day as it grapples with the coronavirus pandemic, company Chief Executive Robin Hayes said in a note to employees Friday. The airline is losing money because only 7,000 customers are "likely to fly us each day in April and possibly May, compared to the 120,000 we would typically expect," Hayes wrote. On a typical day in April last year, JetBlue took in about $22 million from bookings and ancillary fees. Today, it's hauling in only $1 million per day, while $2 million per day is being issued in cash refunds. On Friday, JetBlue submitted an application for payroll support funds to the Treasury Department. JetBlue shares have plunged 55% in the last year. The broader S&P 500 index is down 14% in the last year.

Chemours to tap $300 million from loan facility

6 hours ago

The Chemours Co. said late Friday that it was drawing $300 million from its $800 million revolving credit facility "out of an abundance of caution" amid the economic destruction wreaked by the novel coronavirus pandemic. "This action helps to balance our access to domestic and non-domestic cash, and increase our near-term financial flexibility," Chief Executive Mark Vergnano said in a statement. Repaying the $300 million will happen "when the uncertainty in the global markets subsides," the chemicals company said. Chemours confirmed it had cash and cash equivalents plus borrowing capacity around $1.6 billion as of Dec. 31. It said it had no upcoming maturities of senior debt until 2023. "While the current environment remains uncertain, we remain confident in our financial position, the strength of our businesses, and the long-term prospects for Chemours," Vergnano said. Shares of Chemours fell 1.5% in the extended session after ending the regular trading day down 3.3%.

Dow closes more than 350 points lower as job losses hit an 11 year high

6 hours ago

U.S. stocks closed lower Friday as investors assessed the economic damage wrought by the coronavirus epidemic, after the Labor Department reported the U.S. economy lost more than 700,000 jobs in March, and that the unemployment rate rose to a near three-year high of 4.4%. The Dow Jones Industrial Average fell 358 points, or 1.7% to close near 21,055, the S&P 500 index fell 38 points, or 1.5% to close at roughly 2,489 and the Nasdaq Composite retreated 114 points, or 1.5% to finish at about 7,373. Analysts said the March report understated weakness in the labor market as the underlying surveys of businesses and households was taken in the second week of March, before many restrictions to battle the spread of COVID-19 were in place. Elsewhere, oil prices continued to rise as optimism grew that deal to lower global production would soon be agreed upon. The gains helped to blunt Friday losses to the energy sector, which gained 5.3% this week and was the best performing S&P 500 sector.

BJ's joins list of retailers doing worker temperature checks, will restrict the number of shoppers

6 hours ago

BJ's Wholesale Club Holdings Inc. said Friday that it will start doing worker temperature checks at all locations in the coming weeks, joining Amazon.com Inc. and Walmart Inc. , which also have the policy in place. BJ's will also make masks and gloves available to staff who want to wear them. And starting Saturday, April 4, the retailer will limit the number of customers in one of its warehouses at one time to 20% of capacity. When possible, BJ's will ask that one person per household shop in the club to promote social distancing. BJ's will be closed on April 12, Easter Sunday. BJ's stock is up 14.3% for the year to date, but down 7.3% over the last 12 months. The S&p 500 index is down 13.4% for the past year.

Fed points to slowdown of scheduled bond purchases next week

6 hours ago

The New York Fed tweaked its schedule of bond purchases, pointing to a slowdown in its asset-buying operations as part of its efforts to restore function of the U.S. Treasurys market. The Fed said it would buy $200 billion of government bonds from next Monday to Thursday, an average of $50 billion per day. Over the same period this week, the Fed bought around $278.5 billion of Treasurys over this week's four-day period, an average of nearly $70 billion per day. The central bank also said it planned to slow its buying of agency mortgage-backed securities to $25 billion a day from $40 billion a day. Treasury yields bounced off their lows after the Fed's announcement. The 10-year Treasury note yield was down 2.3 basis points to 0.604%, but off its intraday nadir of 0.568%. The central bank's asset purchases are trying to bring back liquidity in a large swathe of Treasury markets, which briefly seized up amid market volatility.

American Airlines stock's falls toward fresh record low

7 hours ago

Shares of American Airlines Group Inc. , which tumbled 7.9% toward a fresh record low in afternoon trading Friday, after the air carrier said it would cut international capacity by 60% for the "peak" summer travel season. The stock has now erased all of its late March bounce, in which it rocketed 53% in three days off its previous record low of $10.25 on March 23. Since peaking at $15.66 on March 26, the stock has now lost 41% to $9.27 amid a 6-day losing streak. American's move to cut international summer capacity comes as analyst Myles Walton at UBS said the first look at June for airlines is "surprisingly awful," as realized bookings for March, April and May worsen. American's stock was the biggest loser among the Dow Jones Transportation Average's components on Friday. Among other airline components, shares of United Airlines Holdings Inc. shed 4.3%, Southwest Airlines Co. slid 3.7%, JetBlue Airways Corp. gave up 3.0%, Delta Air Lines Inc. declined 2.1% and Alaska Air Group Inc. fell 0.7%. Meanwhile, the Dow transports was down 2.3% and the Dow Jones Industrial Average dropped 395 points, or 1.9%.

UPDATE: COVID-19 case tally: 1.07 million cases worldwide and 55,781 deaths; Italy has highest number of fatalaties

7 hours ago

The number of cases of COVID-19 around the world stood at 1.07 million Friday, after passing the 1 million mark late Thursday, while the U.S. case tally passed 250,000 according to aggregated data from Johns Hopkins Whiting School of Engineering's Centers for Systems Science and Engineering. There are now 56,767 fatalaties around the world from the novel coronavirus that has sickened people in 181 countries, the data show. About 223,697 people have recovered. The U.S still has the most number of cases worldwide, at 258,214 and 6,699 deaths. Another 9,428 people have recovered. In Europe, Spain has overtaken Italy in number of cases. Italy, which fell behind Spain in case count earlier, now has 119,827 cases and at least 14,681 fatalaties, making it the highest in the world. Spain has 117,710 cases and 10,935 deaths. Germany has the fourth highest tally, and is now ahead of China, where the virus was first detected in December. Germany has 89,838 cases and 1,230 fatalaties. China has 82,509 cases and 3,326 deaths; France has 59,948 cases and 6,518 deaths. Iran, another hot spot, has 53,183 cases and 3,294 deaths.

People in close proximity to Trump, Pence will be given COVID-19 tests: White House

7 hours ago

COVID-19 tests will be done on people who are expected to be near either President Donald Trump or Vice President Mike Pence, beginning today, the White House said. "Starting today anyone who is expected to be in close proximity to either of them will be administered a COVID-19 test to evaluate for pre-symptomatic or asymptomatic carriers status to limit inadvertent transmission," spokesman Judd Deere said in a statement.

U.S. oil prices climb by nearly 32% for the week

7 hours ago

Oil futures climbed on Friday, with U.S. prices tallying a weekly gain of almost 32%. Prices extended their Thursday rally on growing expectations that major oil producers will reach an agreement to significantly cut production levels as efforts to slow the spread of COVID-19 continues to hurt energy demand. May West Texas Intermediate oil rose $3.02, or 11.9%, to settle at $28.34 a barrel on the New York Mercantile Exchange. Prices for the front-month contract climbed about 31.8% for the week, according to FactSet data.

Credit Suisse warns investors that triple-leveraged oil fund could result in 'complete loss of their investment'

8 hours ago

Credit Suisse cautioned investors on Friday that buying a leveraged exchange-traded note sponsored by the bank could result in complete loss of their original investment. The investment bank said that VelocityShares 3x Inverse Crude ETN linked to the S&P GSCI Crude Oil Index Excess Return , which trades on the over-the-counter, or OTC, has fallen below an indicative value of $0, as of April 2, 2020. Credit Suisse said that purchases of the ETN after that date "will likely suffer a complete loss of their investment." The ETN tries to deliver triple the daily inverse returns of the S&P GSCI Crude Oil Index, but has been hammered by wild moves in crude oil in recent days. On Friday, battered crude-oil prices were up 9.64% at $27.76 a barrel on the New York Mercantile Exchange after surging 24.7% on Thursday. The VelocityShares web site indicates that the ETN is intended for "sophisticated investors to manage daily trading risks using a short-term investment."

Gold futures end higher, but see modest weekly fall

8 hours ago

Gold futures ended higher on Friday as a drop in March U.S. employment helped to lift demand for the haven metal. For the week, however, prices for the most-active futures contract edged down by roughly 0.5%. "Gold's upside price bias has been restrained by the deflation scare running through financial markets," said Michael Kosares, founder of USAGOLD. June gold rose $8, or 0.5%, to settle at $1,645.70 an ounce.

New York Fed retains Pimco and State Street to manage commercial paper backstop

9 hours ago

The New York Fed said in a statement that they had retained bond fund giant Pacific Investment Management Company, or Pimco, and State Street to run the commercial paper funding facility, which offers a guaranteed rate at which highly rated businesses can borrow funds for a short period. The facility is intended to prop up the commercial paper market where businesses borrow to meet payrolls and pay for other short-term liabilities. Following a similar arrangement during the 2008 financial crisis, Pimco will serve as the investment manager of the facility, while the State Street Bank & Trust Company will be the custodian and accounting administrator. The New York Fed said the facility will be up and running in the first half of April.

Baker Hughes reports a third-straight weekly drop in the U.S. oil-rig count

9 hours ago

Baker Hughes on Friday reported that the number of active U.S. rigs drilling for oil dropped by 62 to 562 this week. That followed decline of 40 oil rigs the week before. The total active U.S. rig count, meanwhile, also declined by 64 to 664, according to Baker Hughes. Oil prices continued to climb after reports said major oil producers will hold a virtual meeting on Monday to discuss possible production cuts. May West Texas Intermediate crude was up $1.61, or 6.4%, at $26.93 a barrel. It traded at $26.96 shortly before the rig data.

Fed's Daly: Ugly jobs data will improve if we fight the pandemic effectively

11 hours ago

The drop in employment and the rise in jobless claims are big numbers but Americans should focus on fighting the virus effectively and then the data will improve, said San Francisco Fed President Mary Daly, in an interview on CNN on Friday. "History tells us that if we fight a global pandemic with the social distancing actions we've taken - the sheltering-in-place - then those economies that do that get through that faster," Daly said. "Those numbers don't stay big if we do these things well," she added.

FedEx remains in compliance with debt covenants, sees results hurt by increased FedEx Ground demand

12 hours ago

FedEx Corp. said Friday that, including the recent proposed debt offering, it expects to remain in compliance with its debt covenants, but indicated there was risk that it may need to amend the covenants if addtional financing is required and results deteriorate further. The package delivery service said that although it has seen increased demand for its FedEx Ground delivery service in the U.S., as shelter-in-place measures in response to the COVID-19 pandemic has boosted demand for e-commerce, the shift in sales mix is expected to hurt margins and operating results. Results have also been impacted by "significantly weaker global economic conditions" as a result of the COVID-19 pandemic. The company's current debt covenant requires the ratio of debt to consolidated earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) to be no higher than 3.5 to 1.0; as of Februay 29, that ratio was 2.8 to 1.0. after previously announced borrowings and proposed offerings, FedEx expects to remain in compliance with the debt-ratio covenant. "However, if we secure additional financing or experience a deterioration in results of operations that would cause us not to be in compliance with the covenant, we would have to seek to amend this covenant. No assurances can be made that such amendment would be approved by our lenders," the company said in a statement. Separately, FedEx said it has implemented temporary surcharges on all international shipments, and has temporarily eliminated its money-back guarantee for all delivery services. The stock, which fell 3.7% in morning trading, has lost 25.6% year to date, while the Dow Jones Transportation Average has dropped 32.4% and the Dow Jones Industrial Average has declined 25.7%.

Under Armour to incur up to $525 million in 2020 restructuring charges, will layoff store workers starting April 12

12 hours ago

Under Armour Inc. says it will incur pre-tax restructuring and related charges in the range of $475 million to $525 million in 2020 related to a plan that the athletic company announced on Feb. 11, before measures to manage the coronavirus pandemic in the U.S. began. The charges include about $290 million to forego opening the New York City flagship, $25 million in employee severance and benefit costs and $95 million in contract termination and other restructuring costs. Under Armour said $300 million of the costs have been incurred by March 31, including the impairment from the NYC flagship. The company expects to realize $40 million to $60 million in pre-tax benefits for the year. Under Armour has withdrawn its first-quarter and full-year guidance. The company's stores will remain closed indefinitely due to the coronavirus outbreak, and Under Armour staff at the full price and outlet stores as well as about 600 U.S. distribution facility workers will be temporarily laid off starting April 12. These staff members will have received four weeks of pay since store closures went into effect on March 16. Those receiving health benefits will continue to do so for two months. Distribution center staff who continue to work will receive a premium bonus. Board members and executives at the executive vice president level and higher will take a 25% pay cut until further notice. Under Armour stock has sunk 64.2% over the past year while the S&P 500 index is down 12% for the period.

Lam Research stock gains after Instinet upgrade

12 hours ago

Shares of Lam Research Corp. are up 0.8% in Friday trading after Instinet analyst David Wong turned bullish on the stock, upgrading it to buy from neutral while maintaining a $265 target price. While he expects the semiconductor-equipment company to feel the effects of COVID-19 for the bulk of this calendar year, he thinks risks stemming from the outbreak have already been dialed into Lam's stock price. "Lam's stock is currently trading at a substantial discount to where it was trading at the beginning of calendar 2020, prior to the COVID-19 outbreak," he wrote. Though the company has exposure to the memory market and faces risk if memory prices collapse, pricing in this area appears to be holding steady, Wong wrote. Lam shares have dropped 24% over the past month as the S&P 500 has declined 16% and as the PHLX Semiconductor Index has decreased 13%.

U.S. stock market opens lower after Friday jobs report shows worse-than-expected 701,000 job losses in March

12 hours ago

U.S. stock benchmarks opened modestly lower Friday after the release of an employment report that showed bigger-than-expected job losses in March, reflecting the coming economic devastation from new strain of coronavirus that has caused personal and business activity halts. The March jobs report showed that 701,000 Americans lost their jobs last month, far exceeding estimates for around 83,0000. It was the first decline in payrolls since September 2010 and not far from the worst month of job losses during the 2007-09 recession. The unemployment rate rose to 4.4% from 3.5%, but the unemployment picture is likely far worse even that the March report after a report on jobless claims released on Thursday showed that 6.6 million people submitted applications for unemployment benefits last week. The Dow Jones Industrial Average was off 126 points, or 0.5%, at the open near 21,309, the S&P 500 index was trading 0.4% lower at 2,518, while the Nasdaq Composite Index was retreating 0.2% at 7,470. However, the market's reaction has been more subdued than some had feared, suggesting that investors may be trying to discount coming data that likely will be grim as the impact of the spread of COVID-19 on the markets and the economy sets in.

Tesla's stock soars after deliveries data; Deutsche Bank now expects a Q1 profit

13 hours ago

Shares of Tesla Inc. soared 15% in premarket trading Friday, as investors cheered the electric car maker's first-quarter deliveries data. The company said late Thursday that the 88,400 vehicles it delivered during the quarter marked its "best ever" first quarter, despite the negative impacts of the COVID-19 outbreak. Deutsche Bank analyst Emmanuel Rosner said the deliveries were "robustly ahead" of his expectations. He now expects Tesla to report of first-quarter profit of 5 cents a share, compared with a previous estimate of loss of $1.25 a share. Rosner also raised his first-quarter revenue estimate by $1 billion to $5.9 billion and lifted his gross margin view to 22.1% from 21.3%. Tesla is projected to report first-quarter results on our about April 29, according to FactSet. Meanwhile, he reiterated his hold rating. Wedbush analyst Dan Ives also kept his rating at neutral, but said the deliveries data represented a "small victory in a dark environment." The stock has gained 8.6% year to date through Thursday, while the S&P 500 has shed 21.8%.

3M argues against ceasing exports of respirators as it preps to work with FEMA to boost production

13 hours ago

3M Co. said Friday the administration of President Donald Trump has asked it to cease exporting respirators that are made in the U.S. to Latin America and Canada, given they are in short supply during the coronavirus pandemic. The company said it is a vital supplier of that equipment in those markets and that there are "signifiant humanitarian implications" to such a move. "Ceasing all export of respirators produced in the United States would likely cause other countries to retaliate and do the same, as some have already done," the company said in a statement. "If that were to occur, the net number of respirators being made available to the United States would actually decrease. That is the opposite of what we and the Administration, on behalf of the American people, both seek. " The company, which was criticized by Trump at a Thursday briefing after it said demand for N95 respirators was exceeding capacity, said it is looking forward to working with FEMA to boost production after Trump invoked the Defense Production Act against the company, giving the federal government more control over its operations. The company has received approval to import 10 million N95 masks made at 3M facilities in China back to the U.S. "We also continue to act on reports of price gouging and unauthorized reselling related to 3M respirators. This activity is unethical and illegal," said the statement. 3M and a half dozen smaller competitors are making about 50 million N95 masks a month, as the Wall Street Journal has reported. The masks block 95% of very small particles and are key for health care workers. Production is far short of the 300 million N95 masks that the Department of Health and Human Services estimated that U.S. health-care workers would need monthly to fight a pandemic. 3M shares were down 2.3% premarket and have fallen 22% in the year to date, while the S&P 500 has fallen 22%.

Dow futures pare loss but hang lower after Friday jobs report for March shows a stunning 701,000 losses

13 hours ago

U.S. stock-index futures on Friday were trading lower, briefly adding to losses on the session, after a report on the state of jobs for the month came in much worse than expected, already revealing early impacts of business closures due to the coronavirus outbreak. Futures for the Dow Jones Industrial Average were off 72 points, or 0.3%, at 21,192, those for the S&P 500 index were down 0.3% at 2,508, while Nasdaq-100 futures were falling 0.4% lower at 7,599. indicating a lower start for the Nasdaq Composite Index . The grim report shows that unemployment jumped to 4.4% from 3.5% in February and comes after a report on jobless claims on Thursday hit a record 6.6 million for the week. Economists polled by MarketWatch had expected losses of 83,000 for March. The reported decline in employment was the biggest in 11 years and one of the largest ever, but it's going to get dwarfed by the job losses in April. In reality, given the past jobless claims report, total unemployment is closer to 10 million, which would represent an unemployment rate of around 10%.

Treasury yields extend drop after U.S. economy sheds 701,000 jobs

13 hours ago

Treasury yields extended their decline on Friday after data showed the U.S. economy lost 701,000 jobs in March. Economists polled by MarketWatch had forecast an 82,000 decline but warned that the report would be unlikely to fully capture the scope of job losses. The 10-year Treasury note yield fell 4.5 basis points to 0.582%. The 2-year note yield was virtually unchanged at 0.227%. The 30-year bond yields slipped 3.7 basis points to 1.231%. The unemployment rate rose to 4.4%, from 3.5%. Companies and businesses across the U.S. are laying off workers as policy makers lock down the economy to contain the COVID-19 outbreak

W.R. Grace sees Q1 profit at high end of guidance, including negative impact of COVID-19 pandemic

14 hours ago

Shares of W.R. Grace & Co. were indicated up a little over 1% in premarket trading Friday, after the specialty chemicals company said it expects first-quarter adjusted earnings per share to be at the high end of the guidance range of 65 cents to 72 cents provided in early February. The company said its outlook included a negative EPS impact of about 6 cents to 10 cents from the effects of the COVID-19 pandemic. The company is expected to report first-quarter earnings on April 30. W.R. Grace said it expects its full-year results to be negatively impacted by the pandemic, but said its manufacturing operations and supply chain have so far not been materially impacted. "Our businesses are designated as critical infrastructure by the U.S. Department of Homeland Security," said Chief Executive Hudson La Force. "Our global manufacturing footprint, strategic flexibility and strong business continuity plans position us to remain a reliable technology supplier to our customers." The company said it has not drawn on its revolving credit facility as it still has "ample" liquidity, and remains "fully committed" to maintaining its dividend. Meanwhile, the company suspended its share repurchase program in March. The stock has lost about half its value (down 51.3%) year to date, while the S&P 500 has declined 21.8%.