Smaller U.S. companies will bear the brunt of the economic downturn triggered by a prolonged coronavirus crisis as they struggle to cut costs as much as bigger multinational peers, analysts' estimates compiled by Reuters showed.
The data, which pooled over 1,000 U.S companies that have market capitalizations of least US$1 billion, showed that analysts expect U.S. firms to post an 18per cent drop in profit in the second half of 2020.Revenue will be down 3.8per cent in the same period, marking the steepest fall in at least a decade, according to Refinitiv data.
Companies with an international presence are expected to have revenue shrink at a higher rate, but their profits will fare better, helped by cuts in operating expenses that company plans show will average 16.5per cent versus 6per cent for U.S.-centric rivals.Boeing Co , Royal Caribbean Cruises and General Electric to name a few have cut thousands of jobs this year to reduce costs.
The companies relying solely on domestic revenue streams, according to data are on average about a third as big by market value compared with the multinationals included.