Ongoing developments surrounding the coronavirus outbreak will remain in focus Wednesday. U.S. stocks rebounded Tuesday after the Trump Administration indicated that it is considering a fiscal stimulus package of more than $1 trillion.
Analysts warn that it will get worse before it gets better. “The turmoil in financial markets caused by the global spread of COVID-19 shows little sign of abating, despite policymakers’ efforts to contain the fallout,” Capital Economics wrote in a note Tuesday. “Our view remains that until evidence emerges that the spread of the virus is slowing down, risky assets are unlikely to rebound on a sustained basis.”
Meanwhile, General Mills (GIS) is scheduled to report fiscal third-quarter financial results ahead of the market open. As the consumer packaged goods company gears up to report, organic revenue growth, COVID-19 impact and guidance will be key focal points.
Organic sales during the quarter is expected to have grown 0.9%, while North America organic sales likely grew 0.3%. J.P. Morgan analyst Ken Goldman noted that General Mills sales growth in Latin America and Asia could have been negatively impacted by the coronavirus outbreak. China represents about 4% of total sales and nearly half of its Haagen-Dazs shops were closed since mid-February.
“At this point, we think GIS might have enough visibility to reasonably forecast the impact of COVID-19 on the Asia and Latin America segment,” Goldman said in a note March 16. “In the US, though, the situation is of course rapidly evolving. When [Campbell’s Soup] and [Kroger] reported a couple of weeks ago, they both acknowledged benefits from pantry stocking but did not include it in their guidance. Given what we have seen over the past couple of weeks (i.e., a surge in food at home consumption) and that GIS is now in its 4Q20 (and thus only needs to project a couple of months out), we expect GIS to include at least some impact from COVID-19 in its North America Retail outlook.”
General Mills is expected to report adjusted earnings of 76 cents per share on $4.21 billion in revenue.
Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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