COVID-19 battered many of the major publicly held companies here this spring, slashing demand for their products and services, their financial reports show.
A survey of 10 such companies either based in Lancaster County or having sizable operations here found four posted net losses in the second quarter and three reported lower net profits.
Three showed higher profits in the April-through-June period, but one of them did so in spite of taking a hit from COVID-19. The remaining two benefited from the pandemic’s impact on consumer behavior.
Here’s a summary of how the 10 fared, based on the quarterly financial reports released over the past two weeks.
CNH Industrial, a maker of farm and construction equipment with a major site in New Holland, reported an adjusted net loss of $85 million (7 cents a share), down from an adjusted net profit of $430 million (31 cents a share) in the 2019 quarter.
Revenue dropped 26.3% to $5.58 billion, as COVID-19 undercut demand worldwide in all four product categories: farm equipment, down 17.9%; construction equipment, down 44.5%; commercial and specialty vehicles, down 35.5%; and powertrains, down 32.7%. Revenue at a fifth segment, financial services, was down 25.0%.
Sharply lower sales due to COVID-19 also led to deep red ink for LSC Communications in the second quarter.
The Chicago-based printer, which is going through bankruptcy reorganization, had a net loss of $63 million ($1.86 a share), down from a net loss of $25 million (72 cents a share) in 2019’s second quarter. Sales declined 38.8% to $532 million.
LSC, with major plants on Harrisburg Pike and Greenfield Road, said COVID-19 reduced demand from retailers and publishers for its catalogs, books and magazines. Demand for its logistics services and office products waned too.
The Hershey Co. reported a 13.9% drop in second quarter net profits as COVID-19 trimmed net sales by 3.4%, although the candy maker said it gained market share during the period.
Net profits were $268.9 million ($1.29 a share), down from $312.8 million ($1.48 a share). Sales slid to $1.71 billion.
Profits declined despite a substantial decline in selling, marketing and administrative expense and in asset impairment charges, partly due to higher interest expense and income tax expense.
Hershey owns Y&S Candies, producer of Twizzlers, with a plant on Running Pump Road in East Hempfield Township.
COVID-19 put the damper on Armstrong World Industries’ second quarter results too, cutting net profits from ongoing operations by 22.3%.
Net profits from ongoing operations were $49.5 million ($1.03 a share), down from $63.7 million ($1.28 a share) in 2019’s second quarter. That was largely because sales for the Lancaster-based ceiling manufacturer tumbled 25.3% to $203.2 million, as the pandemic depressed demand.
The drop in profits would have been more severe except for lower interest expense and a $14.1 million pre-tax gain on the sale of a ceiling plant in China.
Donegal Group benefited from COVID-19. It posted a four-fold increase in second quarter net profits, helped by fewer automobile-accident claims as people reduced their driving during the pandemic.
The Marietta-based insurance holding company had net profits of $22.7 million (79 cents a share), up 373.6% from $4.8 million (17 cents a share) in 2019’s second quarter. Revenue grew minimally, rising 0.1% to $198.9 million.
Also boosting the bottom line were larger net investment gains, which tripled to $6.5 million in the quarter, up from $1.6 million in the 2019 quarter.
At Kellogg Co., higher demand for its biggest product, ready-to-eat cereal, as well as more sales of its frozen foods, lifted second quarter net profits by 22.7%.
Net profits rose to $351 million ($1.02 a share) from $286 million (84 cents a share) in the 2019 period. Sales were $3.47 billion, up only 0.1%. However, the absence of its cookie business, sold a year ago, pulled down sales by 6%; adverse currency translation cut sales by another 3%.
Kellogg, based in Battle Creek, Michigan, with a major plant on State Road in East Hempfield Township, said its results also were buoyed by postponing “a significant amount” of planned spending on brand development and other initiatives to the second half of the year.
Armstrong Flooring got hard hit by COVID-19 again in the second quarter, posted a net loss of $6.3 million (29 cents a share), compared to a net profit of $14.7 million (56 cents a share) in the comparable 2019 quarter.
The pandemic, which caused many independent retailers that carry Armstrong products to close temporarily and led to the postponement of commercial projects, caused sales to fall 18.1% to $145.6 million from $177.7 million.
In addition, Lancaster-based Armstrong said the 2019 quarter got a boost from a $2.7 million income tax benefit and a $9.4 million gain from the disposal of discontinued operations.
The impact of COVID-19 also pushed Burnham Holdings into the red for the second quarter.
The Lancaster-based maker of boilers, furnaces, radiators and other products had a net loss of $368,000 (8 cents a share), contrasting with a net profit of $563,000 (12 cents a share) in 2019’s second quarter. Net sales dropped 22.9% to $32.3 million.
Burnham said that stay-at-home orders forced many of its wholesalers to close, limited installers to only emergency replacements and idled most commercial construction projects, “dramatically impacting demand for our products.”
ENB Financial bucked the trend by posting a 16.5% rise in second quarter net profits, despite setting aside more money to cover potential losses on loans, in anticipation of COVID-19 affecting the ability of borrowers to pay what they owe.
The parent of Ephrata National Bank had net profits of $3.60 million (64 cents a share), up from $3.09 million (54 cents a share) in the 2019 quarter.
Elevating the bottom line was a 307.2% increase in its gains on the sale of mortgages, fueled by a spike in refinancing activity. That rise of $1.27 million was partially offset by a $975,000 provision for possible loan losses, up from $30,000 in the 2019 quarter.
ENB had total assets of $1.30 billion at June 30.
Lancaster-based Fulton Financial likewise was hurt by COVID-19, as LNP | LancasterOnline previously reported, with net profits tumbling 33.8% in the second quarter.