The CDC reversal on masks changed the way companies view the delta variant, earnings calls show


An indication particulars entry restrictions at a JLL workplace in the Aon Center in Chicago, Illinois, U.S., on Thursday, June 24, 2020.

Christopher Dilts | Bloomberg | Getty Images

When earnings season kicked off in earnest in mid-July, few companies fielded questions on or talked about the Covid delta variant.

That changed as new Covid-19 circumstances spiked and the Centers for Disease Control and Prevention reversed its stance on masks for vaccinated folks, in keeping with a CNBC evaluation of earnings name transcripts.

Between July 13 and Thursday, 142 companies in the S&P 500 out of the 410 who’ve reported their quarterly earnings have talked about the delta variant by title or answered a query about it on their earnings calls. Just 15% of these mentions got here earlier than July 27 — the same day that the CDC said that fully vaccinated people should wear mask indoors in areas with excessive transmission charges. New Covid circumstances had been additionally steadily climbing upwards as the extremely contagious delta variant turned the dominant pressure of the virus in the U.S.

The U.S. is reporting a seven-day common of greater than 109,000 new circumstances as of Aug. 5, up practically 28% from one week in the past, in keeping with information from Johns Hopkins University.

For the most half, executives stated their companies aren’t seeing a cloth impression on their enterprise associated to the surge in new circumstances but.

Becton, Dickinson & Co., a medical expertise firm, was one in every of the few to report a change in shopper habits, telling analysts that some U.S. states are seeing much less elective surgical procedures in current weeks due to the variant. During the week ended Aug. 1, 72% of intensive care unit beds in the U.S. had been occupied, in keeping with Johns Hopkins information.

But some companies with a extra international presence stated that exterior of the U.S., it is a totally different story.

“An uneven recovery to the pandemic and a delta variant surging in many countries around the world have shown us once again that the road to recovery will be a winding one,” Apple CEO Tim Cook stated on the company’s July 27 call.

Booking Holdings, the guardian firm of Kayak and OpenTable, stated that July bookings shrank 22% in contrast with 2019 ranges, a steeper decline than June’s fall of 13%.

“Looking within Europe, we saw reductions in room nights in July across several of our key countries including Germany, France and Italy,” Booking CFO David Goulden stated on the firm’s name on Wednesday.

Other companies reported provide chain disruptions as Covid circumstances accelerated in Asia and Europe. For instance, railway operator Norfolk Southern stated that the delta variant is impacting its suppliers in Southeast Asia.

“We’ve got a couple of plants that source parts from Southeast Asia and because of production issues over there, they’ve had to pull forward planned production downtime later this year,” Chief Marketing Officer Alan Shaw stated on the firm’s July 28 name. “And so that has had an impact on our production and our volumes right now.”

The delta variant has additionally led some companies to launch extra conservative forecasts, though most companies stated that they didn’t anticipate one other spherical of lockdowns in the United States.

Abiomed, a medical system maker, advised analysts on its Thursday earnings name that the low finish of its full-year income forecast assumes “some continued unevenness” stemming from the variant, though the firm raised the outlook.

Beyond Meat, which isn’t part of the S&P 500, stated that restaurant operators are being more conservative about their food orders due to the uncertainty attributable to the delta variant, in addition to labor challenges.

“And so for us, I think the main characteristic of the third quarter, and our guidance is, is simply lack of visibility,” CEO Ethan Brown stated Thursday.



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