COVID-19, the disease caused by the new coronavirus that was first identified late last year in Wuhan, China, has been a dominant theme in the earnings releases and conference calls of S&P 500 companies as investors press for answers on how it will impact their financials.
A FactSet search of the 364 earnings call that were held in the period stretching from Jan. 1 through Feb. 13 found 38% included the term “coronavirus” at least once. The industrial, IT and health-care sectors accounted for the highest number of companies discussing the topic, according to FactSet.
While many were asked to quantify the negative impact on their businesses, 34% said it was too early to say and did not include the virus in their financial guidance. As a result, “it is possible that there will be an increase in the number of companies issuing negative guidance later in the first quarter as these companies gain clarity on the impact,” FactSet senior earnings analyst John Butters wrote in written commentary.
This is what companies have been saying:
• Agilent Techonologies Inc. A, -1.05% expects earnings of 72 cents to 76 cents a share on revenue of $ 1.28 billion to $ 1.32 billion “after factoring in the potential impact” of the coronavirus. The lab instruments maker anticipates a $ 25 million to $ 50 million hit in the first half as a result of the virus; a $ 10 million loss in revenue in the first quarter and an estimated $ 15 million to $ 40 million impact in the second quarter. “Our performance was impacted by the extension of the Lunar New Year holiday due to the coronavirus,” CFO Robert McMahon said. “This reduced the number of shipping days in China.”
• Analog Devices Inc. ADI, -0.91% updated its guidance for second-quarter revenue of $ 1.35 billion, plus or minus $ 50 million. “While the effects of the coronavirus are difficult to estimate and the situation remains dynamic, we have reduced our revenue guidance by $ 70 million to account for its potential impact,” the company said in a statement.
• Apple Inc. AAPL, -0.06% is not expecting to meet second-quarter financial guidance because production has slowed or been halted in China due to the COVID-19 outbreak. “Work is starting to resume around the country, but we are experiencing a slower return to normal conditions than we had anticipated,” the company said in a statement on Monday. Apple generates about 15% of its revenue from China, and many of its products are manufactured there.
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• Boston Scientific Corp. BSX, -0.94%, which has a $ 600 million business in China, is expecting a “negative first-half impact” on expectations that Chinese patients will push back elective medical procedures during the outbreak. The company lowered its quarterly sales guidance for the first quarter of 2020. The device maker now anticipates a “preliminary negative sales impact estimate of $ 10 million to $ 40 million.”
• Capri Holdings Ltd. CPRI, -1.75%, which owns luxury brands Jimmy Choo and Versace, said it now expects annual revenue of $ 5.65 billion and adjusted earnings per share of $ 4.45 to $ 4.50 as the virus eats into sales. That’s below the FactSet consensus for revenue of $ 5.78 billion and per-share earnings of $ 4.87.
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• Carnival Corp. CCL, -2.49% said there could be a fiscal 2020 earnings-per-share impact of 55 cents to 65 cents if all operations are suspended in Asia through the end of April. If that comes to pass, according to Carnival, there would be a material impact on the business from suspended cruises in Chinese ports; cancellations in other parts of Asia; and the impact on bookings, which is determined by the length of time that an event influences travel.
• The Coca-Cola Company KO, +0.53% said it is still expecting to reach its full-year guidance though COVID-19 will likely weigh on first-quarter results. Coca-Cola said it currently estimates an approximate 2- to 3-point impact to unit case volume, 1- to 2-point impact to organic revenue, and 1- to 2-penny impact to earnings per share for the first quarter. The Chinese market makes up 10% of Coca-Cola’s global volume, the company said in January. “China’s economy was in a different place when SARS happened,” CEO James Quincey said in January. “It’s worth noting that China’s economy is [now] much bigger, and this could become more connected to the rest of the world.” In its 10-K filing with the SEC, the company also said it has seen delays in the production and export of ingredients used in nonnutritive sweeteners. It doesn’t expect a hit to its full-year results for now.
• Domino’s Pizza Inc. DPZ, +1.00% said that fewer than 20 of its stores are closed in China and the outbreak is slowing down the openings of new stores in that market. Last year, Domino’s opened 80 net new stores in China.
• Ecolab Inc. ECL, -0.52%, a water technology company, said it anticipates a 5 cents hit to EPS as a result of the outbreak. CEO Douglas Baker told investors that if COVID-19 becomes seasonal, like the flu, it may change some behaviors. “If you think if you go back to H1N1, that was really the advent of all the hand sanitizers you see in lobbies of all commercial buildings,” he said, on an earnings call. “Before that, it didn’t exist. So it clearly changed the demand permanently for hand sanitizing products, etc. You may well see that kind of outcome as a consequence of the coronavirus, too.”
• The Estée Lauder Cos. EL, -1.08% said the third quarter will be most impacted by the sales decline of luxury beauty products in China. The company updated its sales outlook for the second half of the year, saying it now predicts an increase of up to 1%, compared with the same period a year ago.
• Expedia Group Inc. EXPE, -0.97% is expecting a $ 30 million to $ 40 million impact on adjusted EBITDA in the first quarter as a result of the outbreak. It also expects “some impact beyond [the first quarter] in 2020 as well,” CEO Barry Diller told investors. “But the exact amount will depend on how long it takes for travel trends to normalize.”
• Fresh Del Monte Produce Inc. FDP, +0.02% CEO Mohammad Abu-Ghazaleh said port closures in China led to a slowdown in trucking and goods were left stacked up at ports over the extended Lunar New Year shutdown. He doesn’t expect the outbreak to fade away before April. “Usually these viruses, they don’t subside until the weather starts warming up, and then we will see the situation getting improved,” Abu-Ghazaleh told investors.
• General Mills Inc. GIS, -0.04% said half of its Häagen-Dazs shops in greater China are closed, and the shops that remain open have “severely restricted hours.” Greater China makes up 4% of General Mills’ net sales, 40% of its sales in the region are at Häagen-Dazs shops and other restaurants. The company told investors it can’t yet share how the closures will affect its numbers for fiscal 2020.
• Gilead Sciences Inc. GILD, -3.84% is working with Chinese authorities to test its investigational antiviral remdesivir as a treatment for people with the new coronavirus. The drug maker plans to conduct a randomized, controlled trial in China as part of those plans, saying that remdesivir has shown “in vitro and in vivo activity in animal models against the viral pathogens” Middle East respiratory syndrome (MERS) and SARS, both of which are also coronaviruses.
• Hasbro Inc. HAS, -1.66% continues “to have office and third-party factory closures” in China as a result of the outbreak. The company said that China is responsible for about two-thirds of its global sourcing. “The biggest unknown right now is how quickly the manufacturing factories can get their production ramp back up,” said Hasbro CFO Deborah Thomas. “Travel is limited, [and] places are still closed.”
• Hilton Worldwide Holdings Inc. HLT, -2.09% said about 150 hotels, totaling approximately 33,000 rooms, are closed in China as a result of the coronavirus outbreak.
• Hormel Foods Corp. HRL, +0.72% expects its international business to have a “very difficult” second quarter as a result of COVID-19. The company said Thursday there has been a slowdown in sales in China, with many restaurants closed, but sales of pantry items like Skippy peanut butter and canned pork Spam have increased. “Similar to other companies in China, all aspects of our in-country supply chain are operating more slowly and at higher cost than normal,” CEO James Snee told investors.
• HP Inc. HPQ, +5.93% said it expects a “negative impact to our top line, bottom line and [free cash flow],” citing delayed production and manufacturing timelines. The technology giant said when taking into account the outbreak, it now anticipates earnings per share of 46 cents to 50 cents and adjusted EPS of 49 cents to 53 cents.
• HSBC Holdings PLC HSBC, -1.18% expects a weaker first-half performance in 2020, due to the downturn in Hong Kong and virus-related credit losses in the first quarter, it said. “The most extreme downside scenario in there I would say makes an assumption that the coronavirus is still continuing in the second half of this year,” an executive said on an earnings call. “If you look at that and that was to become the central scenario, there would be about $ 600 million of additional loan losses provisions required.”
• InterContinental Hotels Group PLC IHG, -1.61% said 160 hotels are closed in China or closed to new guests. The company’s fee business is expected to take a $ 5 million hit in February in China, as a result of the outbreak. Its Chinese operations make up less than 10% of group operating profit. CEO Keith Barr told investors that the postponement and cancellation of conferences will have an impact on its operations, too. “What I saw during H1N1 and other times in China, the key thing to remember is the Chinese government’s ability to stimulate economic growth and activity is unlike any other country,” he said, on an earnings call.
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• IQVIA Inc. IQV, -1.70%, which runs clinical trials, including in China, said it expects a $ 25 million impact in the first quarter as a result of the outbreak. “The patients who are enrolled in a trial are simply not going to visit the hospitals where all the sites are in China because that’s kind of the more dangerous spot right now,” CEO Ari Bousbib told investors.
• ITT Inc. ITT, -1.37% updated its 2020 guidance, providing a downbeat outlook that included an estimated impact from the outbreak. For 2020, the manufacturer currently expects adjusted EPS of $ 3.87, and offered a wider range of $ 3.72 to $ 4.02, compared with the FactSet consensus of $ 3.99.
• Lululemon Athletica Inc. LULU, +0.16% said that the majority of its 38 stores in China have been closed since Feb. 3. The yoga gear seller said it continues to “monitor the situation” and will provide an update on the expected financial and operational impact during its fourth-quarter post-earnings conference call in late March.
• Mastercard Inc. MA, -2.86% said it expects to shave 2 to 3 percentage points from its first-quarter revenue guidance because of the impact of COVID-19 on “cross-border travel and, to a lesser extent, cross-border e-commerce growth.”
• Medtronic PLC MDT, -0.72% told investors that there are closures and slowdowns in factory production of its products as well as a delay in medical device procedures in China as the Chinese health care system focuses on containing the virus. “We do expect this to have a negative impact on our fourth-quarter financial results,” CEO Omar Ishrak told investors, later adding: “Even now, even in places like Beijing and others, procedures are only just beginning.” China makes up 7% of Medtronic’s global business.
• Mondelēz Inc. MDLZ, +0.48% told investors to expect “an impact on both revenue and margins” as China is a high-margin business for the snacks maker. It is also reporting additional transportation costs as a result of a shortage of trucks in China. “I’m quite comfortable saying that there is nothing that taints really the full year at this point in time for us, pending maybe a bigger impact of the coronavirus, which quite frankly we don’t see at this point,” CFO Luca Zaramella told investors.
• Nike Inc. NKE, -0.55% has closed about half its stores in China, while the remaining stores are reporting lower-than-expected retail traffic. The athletic-apparel maker said it plans to provide an update about the impact of the virus on its third-quarter earnings call.
• Norwegian Cruise Line Holdings Ltd. NCLH, -3.64% expects the virus to shave off 75 cents from earnings per share in 2020. The cruise operator has canceled cruises in Asia — that’s 40 total — through the end of the third quarter of 2020.
• L’Oréal LRLCY, -0.39% said the impact from the outbreak will be temporary, based on the cosmetics maker’s experience with the outbreaks of SARS in 2003 and Middle East respiratory syndrome (MERS) in 2015. What is different about this outbreak, however, is L’Oréal’s e-commerce sales of beauty products in China are stronger so far in February than they were this month last year. “This crisis will even strengthen the position of the e-commerce players in China,” CEO Jean-Paul Agon told investors at an analyst conference.
• Procter & Gamble Co. PG, -0.09% expects the outbreak to materially impact earnings for the January to March quarter in China and for the overall company, given that China is the consumer goods giant’s second-largest market. The company has 387 suppliers in China that ship to it globally more than 9,000 materials, impacting about 17,600 different finished products.
• PVH Corp. PVH, -1.81%, owner of the Calvin Klein and Tommy Hilfiger brands, said that 20% of its global sourcing comes from greater China, which also made up 7% of its 2019 revenue. Most PVH-owned stores in China remain closed. Still, the company reaffirmed its adjusted earnings-per-share guidance of $ 1.79 for the fourth quarter and at least $ 9.45 for the full year.
• Ralph Lauren Corp. RL, -1.14% said fiscal 2020 sales could be hurt by up to $ 70 million and operating income in Asia could take a $ 35 million to $ 45 million hit as a result of the outbreak. Two-thirds of the luxury retailer’s mainland China stores have been closed for a week, and about half of its stores were closed another week.
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• Royal Caribbean Cruises Ltd. RCL, -2.78% canceled 18 cruises in Southeast Asia and modified several itineraries as a result of the virus. The cruise-line operator said it expects an impact of 65 cents per share on its 2020 financial performance. If it has to cancel cruises in Asia through April, doing so would impact the company’s 2020 financial performance by an additional 55 cents a share.
• TripAdvisor Inc. TRIP, -2.27% said it may see a low-single-digit percentage impact on its financial results. “We do see some unexpected or new cancellation levels in Asia, but we’re not that exposed to Asia as an overall part of our business,” CEO Stephen Kaufer told analysts.
• Tyson Foods Inc. TSN, -0.67% has restarted some operations in China, but CEO Noel White said the company will face short-term impacts from the outbreak, even if the fallout eventually helps support government efforts in China to “decrease” the number of wet markets. Researchers believe that the virus, common to bats, may have been transmitted to humans via another animal sold at the Huanan Seafood Wholesale Market, a wet market in Wuhan. “We’ll continue to see modern grocery continue to grow in China,” White said. “The combination of [African swine fever] and coronavirus would expedite that transition.”
• Under Armour Inc. UA, -2.26% expects to lose between $ 50 million and $ 60 million in sales to the coronavirus outbreak.
• United Airlines Holdings Inc. UAL, -2.23% rescinded its annual revenue guidance for 2020, saying the outbreak is too unpredictable to ensure that the forecast it issued two months ago will hold up. The airline has suspended flights to and from the Chinese cities of Beijing, Chengdu, and Shanghai as well as Hong Kong through April 24. Those flights were expected to make up 5% of United’s 2020 planning capacity. As such, United “is experiencing an approximately 100% decline in near-term demand to China and an approximately 75% decline in near-term demand on the rest of the company’s trans-Pacific routes.”
• VF Corp. VFC, -2.90%, which owns the sneaker brand Vans, has closed 60% of its owned and partner stores in China. The shops that have remained open are reporting “significant” declines in retail traffic.
• Visa Inc. V, -1.22% said it’s too early to tell how the outbreak will impact the company. “If planes are not flying in and out of China, if hotels are not being filled, which they’re not at the moment, and if the supply chains are being impacted, which I suspect they are, there’s going to be some impact,” a Visa executive said at an investor day. “It’s just going to depend on how long this goes on.”
• Walmart Inc. WMT, +0.35% anticipates a financial impact in the first quarter and potentially the second quarter to its China business as a result of COVID-19. “Due to the current sales mix slanted heavily toward food and consumables, as well as some increased expenses related to the outbreak, we could see a couple of cents negative impact in Q1,” Walmart CFO Brett Biggs said on an earnings call. While many retailers have had to close some of their stores in China, Walmart said all of its stores are open, although the majority have restricted hours and some limited operations.
• Walt Disney Co. DIS, -1.11% said if its shuttered Shanghai and Hong Kong theme parks remain closed for months, it would shave $ 175 million off operating income in the current quarter. Disney’s movie-studio business could also take a hit, as cinemas are closed in China and Disney is preparing to launch the live-action “Mulan” reboot in March.
• Wolverine World Wide Inc. WWW, -1.51% provided a downbeat full-year outlook, citing the negative impact of the coronavirus outbreak on its shoe brands, which include Hush Puppies, Sperry, and Stride Rite. The company reported a net loss of $ 900,000, or 1 cent a share, in the latest quarter, after earnings of $ 39.3 million, or 39 cents a share, in the year-ago period.
• Yum China Holdings Inc. YUMC, -0.57%, which operates fast-food brands including KFC and Pizza Hut, has closed 30% of its restaurants. For those that are still open, same-store sales have declined up to 50% since the Lunar New Year. The outbreak is causing “significant interruption,” said Yum China Holdings CEO Joey Wat. Pizza Hut sales have struggled more than those of KFC, which has a stronger delivery business, as more Chinese customers are opting for takeout at home, the company said.
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