By: Spencer Israel
Despite the popularity of the “Teflon market” moniker the stock market has earned over the previous few years, the global outbreak of the novel coronavirus—now known as COVID-19—has rattled investors and looks like it will be a headwind for weeks and months to come. Analysts are already discounting earnings growth for 2020’s first quarter to just 3% from a previously estimated 6.3% at the start of the year.
Sifting through the array of companies that have either lowered guidance or warned of the negative impact of the outbreak on sales drives home the severity of this situation for companies with financial interests in China. While that accounts for most of the large-cap names the stock market, we’ve compiled a list of the major companies that have materially modified their quarterly or annual revenue outlooks.
Alibaba ($BABA) – The Chinese Tech giant was also vague in its assessment of the virus’ impact, only calling it a “Black Swan” event that “Will present near-term challenges” to the company’s expansion.
Apple Inc. ($AAPL) – The iPhone maker issued guidance that the coronavirus will likely depress sales in the current quarter, though they didn’t specify how much lower their projection is from their original $63B to $67B estimate.
Carnival Cruise ($CCL) – The cruise line on which several passengers tested positive for the virus said in a guidance update that “Global bookings and canceled voyages will have a material impact on its financial results”
Coca-Cola Company ($KO) – The staples company reaffirmed its full 2020 fiscal year guidance, though it did mention that its first-quarter results could be lower by 1-2 percentage points.
Expedia Group Inc. ($EXPE) – The booking company suspended its earlier guidance and alerted investors that the effects of the virus on international travel may show up on the balance sheet beyond the first quarter.
HSBC ($HSBC) – The multinational bank warns of “significant disruption” as a result of the virus after the company had shifted its strategy to China.
Lululemon Athletica Inc ($LULU) – The athleisure company reported that it had closed 38 Chinese stores and assured investors that it will update its quarterly guidance in March to reflect the impact of those closures.
Maersk ($AMKBY) – The international shipping company made clear in its most recent earnings call that 2020 guidance will be “subject to significant uncertainties.”
MGM Resorts ($MGM) – After temporarily closing its Macau properties, MGM resorts revoked its 2020 revenue forecast so that they can reassess the numbers in light of the outbreak.
Nike ($NKE) – The footwear brand has announced it plans to close roughly half of its total stores in China and has warned investors that the outbreak would have a “material impact” on the company’s current quarterly sales figures.
Nio Inc. ($NIO) – The Chinese electric carmaker has not been entirely transparent with the effects of the virus on its bottom line beyond saying in its recent earnings report that “’the unfortunate outbreak of the novel coronavirus first identified in Wuhan, China also affected our sales results.”
NVIDIA Inc ($NVDA) – On its earnings call, the company said its reducing its revenue outlook for the first quarter by $100 million, though it’s still unclear what the ultimate effect of the coronavirus will be on the business.
Norwegian Cruise Line ($NCLH) – While not much, Norwegian Cruise Line did say in its most recent earnings call that the company was experiencing one of its best booking periods even until “The COVID-19 outbreak began having an adverse impact on our business.”
PVH Corporation ($PVH) – The owner of Calvin Klein and Tommy Hilfiger clothing stores closed the majority of its shops in China as a result of the outbreak, sales from which accounted for 7% of PVH’s 2019 revenue.
Royal Caribbean ($RCL) – One of the few companies to provide a concrete estimate of the outbreak’s effect on sales, Royal Caribbean recently said the virus could have an impact of $0.65 per share through 2020.
Yum China ($YUMC) – The Chinese offshoot of Yum Brands had announced the temporary closure of 30% of its stores in response to the virus and reported 40-50% year-over-year decline in sales in the restaurants that remained open since the Lunar New Year.
The author is long BABA, AAPL, CCL, KO, EXPE, LULU, MGM, NKE, NVDA, and RCL in his 401(k).
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