Q1 Earnings: First Brush with COVID-19 Fallout

About nine of every ten Utility Report Card coverage universe companies have now reported Q1 earnings and updated guidance. Takeaway number one: Even among essential services providers, COVID-19 fallout varies greatly.

Every earnings season my first priority for analysis is the Portfolio. Despite the unprecedented uncertainty, I’m happy to report the vast majority of recommended companies were able to issue meaningful guidance. And not only that, the updated forecasts are by and large in line with their expectations three months ago.

That’s truly extraordinary, considering the global economy has suffered its most dramatic setback since the Great Depression of the 1930s. There’s no guarantee even the best in class of essential services won’t ultimately succumb, if the big picture gets cloudy enough. But at least based on what we’ve seen, all of our recommendations are navigating this crisis so far.

Unfortunately, the same resilience doesn’t show up for every company I track. In the past month, five have cut dividends. Two are offering stock instead of cash, and two others now more warn of possible cuts later this year.