Companies feel impact of coronavirus outbreak in China
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Companies around the world have warned that a coronavirus outbreak in China could disrupt supply chains or hurt bottom lines as factories and shops shut and airlines suspend flights.
Apple gave a wider-than-usual revenue outlook range for the March quarter to factor in uncertainty. Apple, which has suppliers in Wuhan, the central Chinese city at the heart of the outbreak, said the reopening of some suppliers’ factories outside Wuhan had been moved to Feb. 10 from the end of January.
The travel industry has also been badly affected. Several countries issued travel warnings about China; some airlines even suspended flights to China. Lufthansa and its subsidiaries Swiss and Austrian Airlines canceled their connections to and from Beijing until February 29. The Chinese authorities urged its own population to postpone travel abroad and prohibited domestic travel groups.
Royal Caribbean Cruises, which canceled three trips of its China-based cruise liner, trimmed its 2020 earnings forecast, adding it would take a further hit if travel restrictions continued until the end of February.
Hyatt and Shangri-La said they will allow travelers from China to cancel hotel bookings for free through Feb. 29.
InterContinental Hotels said it would allow customers to cancel for free reservations made for China for specific dates..
Samsung Electronics extended a holiday closure for some factories in line with Chinese government guidance but declined to comment on the impact, but Samsung affiliate and battery maker Samsung SDI, which counts Volvo among its customers, warned of a hit to its March-quarter earnings.
Nike warned of a financial impact after it closed about half of its own stores in China and reduced operating hours at the remaining stores.
Walt Disney said the closure of its park in Shanghai could hurt its operating income in the second quarter by $135 million, if it is shuttered for two months.
Fliggy, Alibaba’s booking site, offered similar refunds, as did several Chinese and European tour operators.
Chinese experts believe that it could peak in 10 to 14 days. Around 45 million people in the Chinese province of Wuhan are cut off from the outside world. In order to curb the spread of the virus, Beijing has extended the Chinese New Year holiday, and pushed back the opening of the stock markets. When it finally opened on Monday, stock prices crashed. They, however, stabilized again on Tuesday.
As a precaution, Beijing had given the financial system an unusually high injection of 1.2 trillion yuan (€156 billion, $171 billion) to keep the domestic money market and banking system functioning. In addition, import duties on goods that are important in the fight against the disease were eased.
