Apple
The company originally estimated it would bring in between $63 billion and $67 billion in net sales in its fiscal second quarter. The estimate included a $4 billion because of uncertainty surrounding the coronavirus, but they haven't released a new estimate.
The virus, which has infected more than 72,000 people, primarily in China, has a very low mortality rate, meaning the majority of those affected will be able to return to normal life and work after the virus has been contained.
Until then, China's economy will continue to feel the strain. China makes up roughly 20% of global gross domestic product, but the virus has forced the country into lockdown. Stores across the country are closed or closing, factories are shut down or underperforming, and tourism and travel have come to a standstill.
For the first time since 2009, experts predict the global economy will shrink this quarter.
"Markets have been far too complacent about how China's woes would have a direct impact on supply chains for a large number of companies around the world. If factories are closed, are running at partial capacity, or are struggling to get raw materials to make goods, then it is no wonder that supplies will be disrupted," investment director at AJ Bell Russ Mould said Tuesday.
Apple shares fell 1.8% on Tuesday after the announcement, reacting to the company's forecast which was worse than expected.
"While we have discussed a negative iPhone impact from the coronavirus over the past few weeks, the magnitude of this impact to miss its revenue guidance midway through February is clearly worse than feared," Wedbush analysts Daniel Ives and Strecker Backe wrote in a note to clients.
Most analysts, however, aren't changing their bullish views on Apple stock. They predict lower demand and supply for a short time, but expect Apple to bounce back after the outbreak is contained. They also believe the 5G network rollout won't be overly affected by the virus.
"It is actually as clear as can be that this is a temporary, short-term issue, and we wouldn't be surprised if it barely proves to be that," said David Bahnsen, chief investment officer of The Bahnsen Group.
"Yes, demand is down where there is a direct impact, but their productive capacity is not an issue, and delayed demand is hardly systemic with this company and this product," Bahnsen said.
Stocks fell globally after Apple's announcement as the ever widening impact of the coronavirus became apparent. The American Chamber of Commerce in Shanghai warned on Monday that some U.S. manufacturers are struggling with a workforce shortage. Moody's Investors Service had forecasted 5.8% growth for China in 2020, but cut that number to 5.2% on Tuesday to account for the virus's "severe but short-lived" effects.
"Our baseline assumption is that the economic effects of the coronavirus outbreak will continue for a number of weeks before tailing off and allowing normal economic activity to resume," Christian de Guzman, a Moody's senior vice president, said on Tuesday.
Still, other major companies are predicting lower earnings because of the virus. Tesla
