Profit warnings signal virus a global crisis

  • Business
  • Wednesday, 26 Feb 2020

SYDNEY: For big business, the impact of the new coronavirus epidemic is already being felt worldwide.

Mastercard Inc and United Airlines Holdings Inc emerged as the latest companies to warn that sales and profit are getting hurt as the epidemic spreads meaningfully beyond its centre in China’s Hubei province.

Growing outbreaks are emerging in other parts of Asia and in Europe.

The US credit-card network cut its revenue-growth forecast as the spread of infections puts off travellers.

Chicago-based United scrapped its 2020 profit forecast altogether, underscoring the unpredictable nature of the two-month-old health emergency.

With the spread of the outbreak raising questions over whether it will be declared a global pandemic, businesses around the world that are exposed to travel are clear targets.

Singapore Airlines Ltd on Tuesday pulled more flights from its schedule through the end of May, adding to a long list of airlines led by Cathay Pacific Airways Ltd that are cutting capacity as demand craters. Air New Zealand Ltd warned its earnings will be hit, too.

Increasingly, though, the coronavirus has become a concern for any industry fed by a global supply chain.

In China, the biggest consumer market and a factory for the world, manufacturing facilities have closed and even some of the biggest cities put in lockdown.

That has disrupted production, logistics and sales for businesses that churn out modern-day essentials, from Procter & Gamble Co in the US to Germany’s Adidas AG and Australian vitamins maker Blackmores Ltd. — Bloomberg

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