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Communities around the world reeled Saturday as the economic damage and human cost of the COVID-19 pandemic climbed.
More than 1.1 million people worldwide have died from the disease, the Wall Street Journal reported. On Wall Street, stocks closed sharply lower for the week on Friday after a report from the Labor Department confirmed 701,000 jobs had been lost in March, far more than expected and a sign that the economy was taking a bruising from the pandemic much earlier than was assumed.
Read now: The U.S. officially lost 701,000 jobs in March, but in reality millions vanished
Some economists think the unemployment rate could surge as high as 25%, as in the Great Depression.
Also on Friday, the Trump administration recommended that Americans wear “basic cloth or fabric” face masks — not necessarily medical masks — when in public to reduce transmission. The new recommendation, from the Centers for Disease Control and Prevention, is meant to reduce the risk that people who are infected but asymptomatic will spread the virus.
But President Trump appeared to downplay the significance of such a step, calling the recommendation “voluntary, you don’t have to do it” at a Friday news briefing.
The U.S. case tally climbed to 278,568 on Saturday, and marked at least 7,163 deaths, according to data aggregated by the Center for Systems Science and Engineering at Johns Hopkins University. Another 9,920 people have recovered. The U.S. continues to lead the world in the number of cases, with New York the epicenter of the outbreak.
The number of coronavirus-related deaths in New York state rose to more than 3,500 on Saturday, according to Gov. Andrew Cuomo.
Cuomo on Saturday thanked the Chinese government for “helping facilitate” a donation of 1,000 ventilators to arrive in New York City Saturday. Cuomo also thanked Alibaba co-founders Jack Ma and Joe Tsai.
The global tally now stands at 1.14 million cases and 60,887 fatalities. Another 233,930 patients have recovered.
In Europe, Spain has 124,736 cases and 11,744 deaths. Italy has 119,827 cases and the worst fatality rate of any country at 14,681 deaths. Germany’s case tally has climbed to 92,150 and France, at 83,031, has topped China, with 82,543.
See: Captain of coronavirus-stricken aircraft carrier relieved of command
Here’s what companies said about the impact of COVID-19 on Friday:
• American Airlines Group Inc. AAL, -6.66% will suspend 60% of its international capacity for the “peak” summer travel season compared with a year ago, in response to “record low customer demand.” The suspensions include an 80% reduction in Pacific capacity, a 65% cut in Atlantic capacity and a 48% reduction in Latin America capacity. The air carrier is also suspending 25 summer seasonal flights until 2021 and delaying the launch of new routes.
• AutoNation Inc.’s AN, -2.45% sales of new and used vehicles fell about 50% in the last two weeks of March. About 95% of the markets the company generates its revenue from are under lockdown orders from federal, state and local governments. The company has placed about 7,000 workers on unpaid leave, has cut pay and frozen all new hiring. It has cut its advertising spend for the second quarter by about 50% and postponed more than $50 million of discretionary spending. The company has cut the pay of its executive chairman, CEO and president by 50%, and the board of directors is waiving retainer fees temporarily. The company had about $1.1 billion of liquidity as of March 31, and about $700 million of availability under a revolving credit facility.
• Bloomin’ Brands Inc. BLMN, -2.99% Chief Executive David Deno won’t be paid his base salary until further notice, while retaining his bonus. The board of directors will forgo any cash retainer until further notice. Bloomin’ Brands portfolio includes Outback Steakhouse and Bonefish Grill.
• Chico’s FAS Inc. CHS, -4.89% has adopted a short-term shareholder rights plan after stock price disruptions due to the pandemic. The plan aims to guard against any individual or group gaining control of the company in the open market without paying a premium.
• Cummins Inc. CMI, -0.36% is cutting pay for all its U.S. workers by 10% to 25%, in response to lower demand and customer shutdowns. The engine maker is reducing working hours for U.S. employees. Chief Executive Tom Linebarger’s salary will be reduced by 50% and the compensation of its board of directors will be lowered by 25%.
• FedEx Corp. FDX, -6.36% expects to remain in compliance with its debt covenants, but indicated there was risk that it may need to amend the covenants if additional financing is required and results deteriorate further. The package delivery service has seen increased demand for its FedEx Ground delivery service in the U.S., as shelter-in-place measures boost demand for e-commerce, but the shift in sales mix is expected to hurt margins and operating results. Results have also been impacted by “significantly weaker global economic conditions.” Separately, FedEx implemented temporary surcharges on all international shipments, and temporarily eliminated its money-back guarantee for all delivery services.
• Lowe’s Cos. LOW, -0.79% is raising wages by $2 an hour for all full-time, part-time and seasonal hourly workers for the month of April, throughout the U.S. and Canada. The home improvement retailer also said it will close all stores by 7 p.m., which is an hour later than rival Home Depot Inc. HD, -1.44% Lowe’s will make masks and gloves available to all employees “who want them,” and has developed an app, which is available on employees’ hand-held devices, to implement a new customer limit protocol. The retailer also installed plexiglass shields at all points of sale and increased third-party cleaning shifts in the stores.
• Ocwen Financial Corp. OCN, -18.35%, a non-bank mortgage servicer and originator, pulled financial guidance. The company has about $264 million in unrestricted cash and expects to be fully compliant with its financial covenants at the end of the first quarter. It also has undrawn credit availability of $104 million under its servicer advance funding facilities, $225 million under its MSR financing facilities, and $156 million under its mortgage warehouse funding facilities. For now, Ocwen has not laid off or furloughed any employees and has no plans to cut pay.
• Tupperware Brands Corp. TUP, -2.77% has drawn down $225 million from its credit agreement. The company is using $50 million for working capital in the second quarter, and the remaining $175 million is a proactive measure against the pandemic.
• Under Armour Inc. UA, +8.56% 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 pandemic began. The charges include about $290 million to forego opening the New York City flagship store, $25 million in employee severance and benefit costs and $95 million in contract termination and other restructuring costs. The company expects to realize $40 million to $60 million in pre-tax benefits for the year and has withdrawn its first-quarter and full-year guidance. The company’s stores will remain closed indefinitely and 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.
• Walt Disney Co. DIS, -3.18% will begin furloughs on April 19. Disney has kept all of its workers on payroll despite closing theme parks and closing down movie shoots, but said that would end later this month.
• W.R. Grace & Co. GRA, -0.55% 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 specialty chemicals company said its outlook included a negative EPS impact of about 6 cents to 10 cents from the effects of the 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.
Additional reporting by Tonya Garcia, Tomi Kigore, Jaimy Lee, Claudia Assis, Jeremy Owens and Jon Swartz
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