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


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A sign details entry restrictions at a JLL office 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 about or mentioned the Covid delta variant.

That changed as new Covid-19 cases spiked and the Centers for Disease Control and Prevention reversed its stance on masks for vaccinated people, according to a CNBC analysis of earnings call transcripts.

Between July 13 and Thursday, 142 companies in the S&P 500 out of the 410 who have reported their quarterly earnings have mentioned the delta variant by name or answered a question about it on their earnings calls. Just 15% of those mentions came before July 27 — the same day that the CDC said that fully vaccinated people should wear mask indoors in areas with high transmission rates. New Covid cases were also steadily climbing upwards as the highly contagious delta variant became the dominant strain of the virus in the U.S.

The U.S. is reporting a seven-day average of more than 109,000 new cases as of Aug. 5, up nearly 28% from one week ago, according to data from Johns Hopkins University.

For the most part, executives said their companies aren’t seeing a material impact on their business related to the surge in new cases yet.

Becton, Dickinson & Co., a medical technology company, was one of the few to report a change in consumer behavior, telling analysts that some U.S. states are seeing less elective surgeries in recent weeks because of the variant. During the week ended Aug. 1, 72% of intensive care unit beds in the U.S. were occupied, according to Johns Hopkins data.

But some companies with a more global presence said that outside of the U.S., it’s a 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 said on the company’s July 27 call.

Booking Holdings, the parent company of Kayak and OpenTable, said that July bookings shrank 22% compared with 2019 levels, 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 said on the company’s call on Wednesday.

Other companies reported supply chain disruptions as Covid cases accelerated in Asia and Europe. For example, railway operator Norfolk Southern said 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 said on the company’s July 28 call. “And so that has had an impact on our production and our volumes right now.”

The delta variant has also led some companies to release more conservative forecasts, although most companies said that they did not expect another round of lockdowns in the United States.

Abiomed, a medical device maker, told analysts on its Thursday earnings call that the low end of its full-year revenue forecast assumes “some continued unevenness” stemming from the variant, although the company raised the outlook.

Beyond Meat, which is not a part of the S&P 500, said that restaurant operators are being more conservative about their food orders because of the uncertainty caused by the delta variant, as well as 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 said Thursday.

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