Retail landlord Simon Property Group took a $315 million hit to its Q2 operating profit from COVID-19 through “rent abatements” and a “higher provision for credit losses,” said CEO David Simon on a quarterly call Monday. The company runs about 200 malls and other retail properties in 37 states. “Given the lack of local, state and federal government support for our industry, we went out of our way to abate rent for thousands of local small businesses, entrepreneurs and restaurateurs and other retailers for the period they were closed,” said Simon. The company estimates 91% of its properties were “open and operating” through Aug. 9, he said. Reopened stores reported their June sales exceeded 80% of their 2019 volume, he said. Movie theaters, gyms and restaurants are the bulk of “remaining tenants” that are still closed due to “restrictive governmental orders limiting or prohibiting their operations,” he said. The Great Recession of 2008 “pales in comparison to what we're dealing with” in the pandemic, said Simon. The number of bankruptcies “in our sector” is “tremendous,” he said.
The personal health and safety risks of COVID-19 are casting autonomous driving in a more positive public light than before the pandemic, Motional President-CEO Karl Iagnemma told an Axios webinar Tuesday. The Hyundai-Aptiv autonomous vehicle joint venture was rebranded Tuesday as Motional.
Amid telework and remote-learning, Q2 laptop and tablet imports soared by triple digits from Q1, according to new Census Bureau data we accessed Sunday through the International Trade Commission. U.S. importers sourced 31.15 million notebooks and tablets under Harmonized Tariff Schedule’s 8471.30.01, a 116% sequential increase and up 15% from the 2019 quarter. Dollar imports were $31.15 billion. China's 28.61 million units were 91.8% of all U.S.-bound shipments, up 124.7% from Q1 when China was starting to rebound from COVID-19 factory shutdowns and supply chain disruptions. TV unit imports under HTS 8528.72.64 were 11.54 million, up 45.7% from Q1 and a 32.9% increase from the 2019 quarter. The average was $219.59, 17.8% cheaper than in Q1 and a 29.8% decrease from the 2019 quarter. ITC's DataWeb keeps TV import records dating to 2007, and we couldn’t find a lower one. Mexico’s diminished role as a key supplier of premium TVs was one factor in the increased commoditization as the country grappled with COVID-19 shutdowns and disruptions for much of April. China was 38.6% of TV imports to the U.S. in Q2, more than double its 17.8% Q1 share. The average TV import with a screen size larger than 45 inches was $313.61. Census began tracking large-screen TV imports under the HTS 8528.72.64.60 in 2016, and we couldn’t find a lower average. Display Supply Chain Consultants President Bob O'Brien emailed Monday that as stay-at-home mandates proliferated, "low-priced TVs did well and high priced TVs did not," he said. "There were TVs bought for kids to do gaming, and for parents to stream, but the need to have the TV as a showcase (like when you're having a Super Bowl party) just evaporated."
Synchronoss Technologies got a five-year contract extension with top customer Verizon that includes a joint marketing agreement for Synchronoss “to step up our marketing efforts to sell Verizon Cloud to their wireless subscriber base,” said CEO Glenn Lurie on a Monday investor call. “We have not previously had, to this degree, a dedicated and coordinated direct marketing effort.” Synchronoss will focus near term on “cloud adoption in the setup flow when Verizon is onboarding a new customer or an existing customer upgrade to their device,” said Lurie, former CEO of AT&T’s mobility and consumer operations. “We believe this joint marketing effort will be a powerful catalyst to drive adoption of Verizon Cloud.” Other Synchronoss initiatives in the contract extension “augment Verizon's service offerings in other areas, which provide us with expanded access to Verizon customers and help us continue to grow cloud revenue,” he said. The stock closed 14.7% higher Monday at $3.51.
Gogo took a “devastating” Q2 hit from the COVID-19 pandemic's obliteration of commercial airline passenger traffic, said CEO Oakleigh Thorne on a Monday investor call. “It certainly was an extraordinary quarter, but for all the wrong reasons,” he said. “If you sell internet on an airplane and no one’s on the plane, it’s tough to make a living.”
COVID-19 dealt Universal Display a significant Q2 blow, with revenue down 48% from Q1 and 51% from the 2019 quarter, said CEO Steve Abramson on a Thursday call. The OLED materials and technology supplier's customer orders and shipments declined, he said: “While COVID-19 uncertainties will likely weigh on consumer demand in the near term, we continue to invest and further strengthen our leadership position in the OLED ecosystem.” OLED’s long-term growth path is “unchanged and remains robust,” he said. Customers are expressing “cautious optimism” about 2020's second half, fueled by a “pickup in demand” in July, he said. But “significant uncertainties still loom,” and it’s “prudent” that Universal continues to refrain from giving 2020 guidance, he said. Despite the significant increase in July orders and shipments, "the real question is whether it is sustainable," said Chief Financial Officer Sid Rosenblatt.
There needs to be “lots of innovation for various display technologies” so they can adapt to “our new normal life” of COVID-19 work-from-home and remote-learning mandates, Frank Ko, president-chief operating officer of panel maker AU Optronics, told the virtual Display Week conference. His keynote was prerecorded and screened for the first time Friday. Telework and remote learning means people will spend a great deal more time with their displays than before the pandemic, said Ko. AUO is responding by bringing more “eye care display technologies” to market, he said. E-paper displays are “more natural for humans” because they have no backlights and no “light emissions,” he said. “AUO has launched notebook and desktop displays with low blue light.”
Q2 trial subscriptions at Dropbox were 20% higher than before COVID-19, said CEO Drew Houston on a quarterly call Thursday. Conversion rates stayed "consistent" with trends, he said. He thinks the shift to “distributed work will ultimately be as significant as the shift to mobile or the shift to cloud." Dropbox's recent deployment with the University of Michigan was “one of our largest educational deals to date, as institutions around the world look to accelerate their digital transformation efforts and shift to a remote-learning environment,” said Houston. “Companies are also increasing their reliance on Dropbox as they make the transition to distributed work.”
COVID-19 sent GoPro Q2 revenue tumbling 54% from the 2019 quarter, up 12% sequentially, said CEO Nicholas Woodman on a Thursday call. “Demand for GoPro cameras consistently improved throughout the second quarter, and we've seen a faster-than-expected rebound in sell-through at retail,” he said. “We remain on track with our product launches slated for the second half." The company's shift to a more direct-to-consumer business model with lower operating costs is working, said Woodman. “GoPro has adapted to the pandemic, and we believe our consumers are learning to live with the pandemic, too.” The stock closed 11% lower Friday at $4.94.
COVID-19 is affecting "near-term demand” in Universal Electronics Inc.'s traditional home entertainment and security businesses, said CEO Paul Arling on a quarterly call (See Q2 materials here). UEI's MVPD and security customers’ “ability or willingness to install hardware in consumers' homes” for new service or upgrades “has been disrupted," he said Thursday. Arling said a recent falloff in MPVD activations was driven by “operator policies that restrict new installations due to the risk of COVID-19 to their installers, while in other cases, consumers are reluctant to allow installers in their homes.” Declines in MVPD subscriber counts have been due to “a decrease in professional installations and hence new activations.” Lack of live sports contributed to new connections declines, he said. Generally, the executive noted, “lines defining content sources have blurred." Comcast generated 19.3% of sales. Revenue “continues to be challenged by headwinds related to customers relying on truck rolls for new installs,” Colliers analyst Steven Frankel wrote investors Friday. Sales were $153.1 million vs. $193.9 million in the year-ago quarter. Frankel sees UEI’s shift to advanced voice remotes and software licensing as higher margin opportunities, but growth “is likely to remain challenging in the next several quarters.” Chief Financial Officer Bryan Hackworth said the company’s restructuring efforts allowed it to reallocate expenses to R&D. The Q3 guidance is for revenue of $150 million-$160 million vs. $200.7 million in Q3 2019. Shares closed down 5.89% Friday at $44.48.