CEOs reflect on tough quarter, but also offer some good news on earnings calls

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Coca-Cola President and CEO James Quincey attends a press conference with International Olympic Committee (IOC) president and China Mengniu Dairy CEO and Executive Director, as part of the 134th Session of the International Olympic Committee (IOC) at the SwissTech Convention Centre in Lausanne, on June 24, 2019.

Fabrice Coffrini | AFP | Getty Images

With so few companies providing numerical guidance, investors are listening carefully to earnings conference calls for some hint — any hint — on what is going on. Here are some comments from CEOs in the last day or so, on tobacco, gasoline, RV, truck and can sales.

The main thing that stands out from earnings conference calls so far: It’s really tough figuring out what is going on. Both Coca-Cola and IBM declined to provide guidance.

Coca-Cola CEO James Quincey: “[T]here are too many known unknowns ahead of us. Because whilst, yes, we have seen sequential improvement through the second quarter into the beginning of July, in all geographies, all major geographies around the world, the principle unknown is the degree of lockdown going forward.”

IBM CEO Arvind Krishna: “In April when we said that we will reevaluate in 90 days, maybe we were a little bit optimistic … uncertainty in the economy makes us unwilling to provide guidance”

There is some good news: Driving is definitely up, according to retail gas station operator Murphy USA. Murphy reported gasoline volumes in July are at 90%. Also, lottery sales up 31% in the quarter. “With volumes recovering to over 90% of prior year levels on a rolling 7-day basis in July, we are forecasting year-end same-store volumes to recover to around 95% of 2019 levels as we enter 2021,” CEO R. Andrew Clyde said.

There’s no recession in smoking. “After a difficult April and May, the industry recovery has now started, providing better visibility for the rest of the year,” said Philip Morris CFO Emmanuel Babeau.

A lot of people are buying RVs. “We saw a significant increase in reservation activity and revenue in the month of June, says Marguerite M. Nader, CEO of Equity LifeStyle Properties. “The demand is high for customers to travel in a controlled environment.”

Truck sales seem to be rebounding as well. Paccar CEO R. Preston Feight: “For us, we saw steadily increasing production through the second quarter. And that really is a result of the good freight market that’s out there right now. In fact, if you think about freight, you can think about the levels we’re operating at are kind of similar to the beginning of 2018. So really solid levels of freight going on in the world. Our customers are profitable. Fuel prices are low and activity continues to be high.

There has been a permanent shift of consumer demand to canned foods: Crown Holdings CEO Timothy J. Donahue: “There is no doubt an increase in food can demand because of the pandemic, both in North America and Europe. As I said on earlier, our customers in Europe believe this is more permanent in terms of the consumers’ demand for food cans.”

 —Transcript provided by Senteio.

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