How the Virus Outbreak Is Hurting These 3 Major Companies

USA – The past few weeks saw the stock market seesawing as the world reacts to the rapid spread of the coronavirus. While the outbreak has affected the global market, some companies have felt the pain of its fallout more keenly than others.

Three companies in particular could find themselves in pain for the foreseeable future – Apple, Royal Caribbean Cruises, and Starbucks.

The coronavirus threat has the potential to really hurt Apple. During a recent earnings conference call, Tim Cook attempted to calm fears when he told stakeholders that the company was closely monitoring the development of the virus. The Apple CEO also said they were coordinating with their partners and people in the affected area and have limited travel to the area.

However, 15% of the company’s sales were from China. Three Apple stores have also been closed, along with several retail partners. The shut down will already have an impact on the company. It becomes worse if you consider that the majority of iPhones are assembled in China, with many of the company’s suppliers located in Wuhan.

Many of Apple’s manufacturing facilities in China have been closed for more than a week now. If it remains shut down for long, the Cupertino-based company could find itself unable to meet market demands.

The travel and tourism industry have been greatly affected by the Wuhan virus, and Royal Caribbean Cruises are just one of the many firms hurting. The cruise line has already suspended three trips of its Spectrum of the Seas ship, which docks in China. The company loses around $3 million to $4 million in revenue for every cancelled trip. Shares will also be impacted by the ship’s grounding.

Another company that’s feeling the pinch is Starbucks. China is the coffee chain’s second biggest market, and a large portion of its plans for future growth relies on the Asian country. However, those prospects are currently in danger of going up in smoke due to this emerging global health crisis.

Starbucks was already experiencing a solid first quarter. The company’s consolidated net revenue went up 9% year-over-year to hit $7.1 billion. Their global comparable sales and adjusted earnings per share both grew by 5%.

However, those numbers could change drastically next quarter. Starbucks have already closed half of its stores in China and have reduced operating hours of the other half. While these are temporary measures, the unknown length of the business disruption and the drastically reduced customer traffic are expected to have an impact in their fiscal 2020 showing.