Several companies have lowered or withdrawn their forward-looking revenue estimates as the coronavirus tears into operations.
Microsoft was the most recent to warn investors of the outbreak's effect on financials, announcing Wednesday its Windows and Surface businesses would see worse-than-expected sales due to supply chain disruption.
The announcement drove Microsoft stock down as much as 4.8% in Thursday trading, wiping out as much as $62 billion in market value.
Here are six industry leaders that recently cut guidance due to the coronavirus epidemic, and how much of their market cap was erased the following trading session.
More companies are updating their forward guidance to reflect coronavirus fallout, and investors aren't enjoying the results.
Microsoft announced on Wednesday its sales in the first quarter of 2020 would be lower than initially expected due to virus-related supply chain issues. The tech giant joined several other US firms quantifying the hit to their regular operations, including Apple, Mastercard, and Royal Caribbean Cruises.
The slashed projections are among the many results of coronavirus' effect on global markets. The Dow Jones Industrial Average and the S&P 500 entered correction territory on Thursday as US stocks sank for the sixth straight trading session. The 10-year Treasury yield has notched numerous record lows as investors piled into defensive assets. Gold, a traditional hedge against tumbling stocks, hit its highest level since 2013 on Monday.
Several economists are now warning investors of a prolonged hit to equity prices as the outbreak spreads further around the world. The S&P 500 could slip to its lowest level since June on virus fears, Goldman Sachs said in a Thursday note, adding that US firms will fail to grow profits in 2020. Former Federal Reserve chief Janet Yellen alerted on Wednesday that the US could fall into a recession if the coronavirus epidemic escalates.
Companies' updated forecasts serve as the most material sign yet of a direct hit to future stock performance. Here are six US firms that have cut their guidance on coronavirus fallout, and how much market cap was erased the following trading day.
Market cap erased on day of update: $54.7 billion as of 2:30 p.m. ET, as much as $62 billion intraday
Microsoft warned on Wednesday afternoon it would miss its initial revenue projection for the fiscal third quarter due to coronavirus' impact on its Windows and Surface businesses. The segment relies heavily on production operations in China, and the tech giant may now move manufacturing of its Surface devices outside the country, Nikkei Asian Review reported.
Market cap erased on trading day after update: $26 billion
Apple nullified its previous guidance for the March quarter on February 17, citing "temporarily constrained" iPhone supply and weak demand in China. The company previously closed all of its retail locations in China to curb further spreading of the virus. Apple deemed its now-rescinded guidance "wider-than-usual" in its last earnings report due to uncertainties surrounding the outbreak.
Market cap erased on trading day after update: $21.9 billion
Mastercard announced on Monday it would lower its first-quarter and full-year revenue forecasts, citing the virus' impacts on travel and e-commerce growth. The credit card company expects quarterly revenue growth to slow by 2% to 3% if the outbreak continues to grow at its current pace. Yearly revenue growth would stand "at the low end of the low-teens range" if the virus' impact is limited to the first quarter, Mastercard added.
"There are many unknowns as to the duration and severity of the situation and we are closely monitoring it," the company said, adding it would update investors again in its first-quarter earnings call.
Market cap erased on trading day after update: $6 billion
Coca-Cola reaffirmed its full-year guidance on Friday but warned of an earnings per share hit of 1 cent to 2 cents in the first quarter. The beverage giant said the outbreak disturbed its supply chain, including the shipment of artificial sweeteners from China. Its diet and zero-sugar products were hit with an export delay, Coca-Cola said Monday in a regulatory filing.
The company expects to give more detail on the virus' effect on business in its April earnings report.
Royal Caribbean Cruises
Market cap erased on trading day after update: $1.5 billion
Royal Caribbean Cruises has issued a number of guidance updates through February as it cut more trips in Southeast Asia. The latest adjustment came Tuesday when it brought the total to 30 canceled trips. The company also issued several itinerary modifications for its business in the region.
Royal Caribbean expects the virus' impact to erase 90 cents from 2020 earnings per share, adding that the cancellation of all trips to Asia through April would add another 30-cent hit to the profitability metric.
Market cap erased on trading day after update: $1.2 billion
United Airlines was the first US airline to withdraw its annual revenue guidance, attributing the decision to heightened uncertainty around weakened travel activity. The company was experiencing "an approximately 100% decline in near-term demand to China" and a 75% drop in demand to its other trans-Pacific routes, according to a Monday regulatory filing.