"US Unlisted Companies Q2 Net Profit Expected to Drop 44%... Worsened from Q1 Due to Lockdown Impact"

'Fall Warning' Based on Top 500 US Listed Companies... Experts Say "Q2 May Be the Bottom of the Recession"

People wearing masks are passing in front of the New York Stock Exchange (NYSE) in the United States earlier this month. [Image source=AP Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Due to the spread of the novel coronavirus infection (COVID-19), the second-quarter earnings of the top 500 publicly traded companies in the United States are expected to decrease by 44% compared to the same period last year, marking the largest decline since the fourth quarter of 2008, the Wall Street Journal (WSJ) reported on the 19th (local time).

WSJ cited data from financial information provider FactSet, presenting the second-quarter net income forecast for companies belonging to the S&P 500. This decline is more than twice the 14.9% decrease in net income for S&P 500 companies reported by FactSet in the first quarter.

WSJ stated, "The first quarter of this year was a period of mixed economic growth and turmoil. Although the United States implemented lockdown measures, they lasted only a few weeks during the first quarter, and the impact was influenced by the increase in COVID-19 cases in Asia and Europe." It explained that the lockdown measures to curb the spread of COVID-19 in the U.S. likely had a greater impact in the second quarter than in the first quarter.

Sam Stovall, Chief Investment Strategist at research firm CFRA, said, "If the first quarter was the trailer, the second quarter is the main show," suggesting that the second quarter could be the bottom of the economic recession.

According to an analysis by Dow Jones Newswire, the industries that experienced the largest sales declines due to COVID-19 in the first quarter were energy, offline retail, automotive, and industrial goods. The impact was also significant in airlines, hotels, food services, and cruise lines. In particular, energy companies saw a sales decrease of as much as $17 billion due to the COVID-19 impact. In contrast, sectors such as e-commerce actually saw an increase in sales.