Conference call summary: Wall Street executives divided on post-COVID recovery outlook

Fiscal 2020 was a year like none before for the markets. While a few industries were quick to get back to their feet post the pandemic – thanks to pent-up demand and changing consumer behavior – others are still in the healing process. 

Looking ahead into 2021, Hasbro and Take-Two Interactive remain optimistic on growth prospects based on the strength of their product portfolios as well as upcoming product offerings. Twitter, on the other hand, believes the massive growth witnessed recently in its mDAU (monetizable Daily Active Users) is likely to negatively impact its growth rates in the coming year. Walt Disney also voiced similar concerns during the recent conference call, with parks and broadcasting business continuing to see headwinds associated with COVID-19.

General Motors, which reported results on Wednesday, said it believes the light vehicle industry in the US could see a turning point in the spring, helped by the widespread availability of COVID-19 vaccines and favorable weather. The automaker also plans to spend over $6 billion on electric vehicles and $1 billion on autonomous vehicles in 2021. See earnings infographic. 

While Coca-Cola management feels recovery might vary between markets depending on the effects of the vaccine rollout, rival PepsiCo expressed confidence in seeing customers reverting back to pre-pandemic behaviors by the second half of the year.

HASBRO 

As we look to the coming year, we continue to see consumers and retailers turning to our categories and Hasbro. We have amazing new lines coupled with planned increases in theatrical, television and streaming entertainment to drive the business. Investments in innovation and new growth drivers, including digital gaming and entertainment will come to market. We believe we will grow in 2021 as we continue navigating through COVID-19, while leveraging our unparalleled portfolio of brands and capabilities in consumer products, gaming and entertainment.

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TAKE-TWO INTERACTIVE SOFTWARE

Looking ahead, our organization is currently undertaking numerous initiatives that we believe will add scale to our business and drive continued success. We are significantly expanding the breadth and depth of our offerings and currently have the largest most diverse long-term product pipeline in our history. While we are excited by the potential of these future releases, we are still pursuing our goal of creating a more consistent release schedule and increasing our development capacity.

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TWITTER

While we typically don’t provide an outlook for mDAU, this is an unusual year on a number of levels, and we recognize our recent outsized growth will impact our growth rates in 2021 in a way that merits explanation. There are no changes to the ambition we shared pre-pandemic, when mDAU was at 152 million, for us to grow mDAU 20% or more over multiple years. We expect mDAU growth, as Jack had mentioned, of about 20% in Q1. But due to the tougher comps, we expect quarterly growth rates in the low double digits on a year-over-year basis in Q2, Q3 and Q4, with the low point likely in Q2.

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GENERAL MOTORS

As we enter 2021, we see ongoing industry recovery and strong demand for our most profitable products. The underlying business has never been more robust. With continued recovery of the US light vehicle industry in ’21, we expect SAAR to be in the mid-16 million unit range with a stronger second half as we experience normal seasonality in Q1, and expect to see an inflection point in the spring as vaccination rates increase and warmer weather lifts consumer sentiment in auto demand. Our capital allocation plan includes more than $6 billion spending on EV and $1 billion on AV in 2021. We will fund these growth investments with internally generated cash while maintaining our investment-grade balance sheet.

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THE COCA-COLA COMPANY

Thinking about 2021, there is no doubt the near-term trajectory of our recovery will still be impacted by the presence of the virus in most markets. It is still early days in the vaccination process, and we’d expect to see further improvements in our business as vaccinations become more widely available over the coming months. It’s clear that the pace and availability of vaccines will look different around the world and therefore we’ll likely see some level of asynchronous recovery depending both on vaccine distribution and other macroeconomic factors.

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PEPSICO

We expect changes in consumer behavior driven by the COVID-19 pandemic to continue to vary across different markets and channels around the world. Broadly speaking, we assume that vaccination efforts will accelerate and that population mobility trends will gradually improve as consumers return to certain pre-pandemic behaviors by the second half of this year. We are also assuming that certain pandemic-related behavioral shifts will sustain, such as greater online adoption and penetration, more remote work arrangements and continued strength in household penetration for large, trusted brands.

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THE WALT DISNEY COMPANY

Our broadcasting business will be negatively impacted in the second quarter due to lower political advertising versus the prior year, in addition to the shift of The Academy Awards to the third quarter. We expect that Walt Disney world attendance in the second quarter will be impacted by typical seasonality headwinds in addition to continued COVID-related headwinds and capacity constraints. Our current expectation is that Disneyland and Disneyland Paris will be closed for the entirety of the second quarter, but we are hopeful we will be able to reopen Hong Kong Disneyland during the quarter.

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