Coronavirus forces massive AAPL hit, Microsoft earnings warning

Posted:
in AAPL Investors edited February 2020
As uncertainty swirls about the coronavirus impact technology industry-wide, industry stalwart Microsoft has issued an earnings warning, and Apple stock price continues to plummet.




Microsoft said that coronavirus impacts are limited to its relatively small hardware division, and to Windows operating system licensing to original equipment manufacturers (OEM).

"Although we see strong Windows demand in line with our expectations, the supply chain is returning to normal operations at a slower pace than anticipated at the time of our Q2 earnings call," Microsoft said late on Wednesday. "As a result, for the third quarter of fiscal year 2020, we do not expect to meet our More Personal Computing segment guidance as Windows OEM and Surface are more negatively impacted than previously anticipated."

Microsoft's "More Personal Computing Segment" includes Windows licensing, accessories, Surface hardware, all of Microsoft's gaming initiatives. The company previously expected $10.75 billion to $11.15 billion from the segment in the quarter.

Prior to the announcement, Microsoft stock was worth $170.17 per share. In pre-market trading, it has fallen 3.92 percent to $163.50. It has not issued refreshed guidance, beyond the fact that it would miss its revenue targets from the business segment.

Continued AAPL impact from the coronavirus

Apple told investors much earlier that it would be impacted, with a similar message to Microsoft's issued on February 17.

At 9:02 A.M. Eastern time, Apple stock is valued at $283.32. This is a 3.2% drop from the Wednesday's close. The trading day before Apple's statement that it would miss quarterly guidance because of the coronavirus, Apple stock was worth $324.95 at close.

For the most part, analysts believe that the problem is a temporary one, with few industry observers cutting back on long-term Apple stock price prognostications.

The coronavirus and the tech industry story so far

The 2019 Novel Coronavirus, officially named "2019-nCoV" is a type of coronavirus responsible for causing respiratory distress in the infected. Symptoms are typically flu-like, with a fever, cough, and shortness of breath. Those infected usually go on to develop pneumonia.

Those at greatest risk are children under three and adults over 65. Many of the deaths in the 2019-nCoV outbreak have been those who already had pre-existing conditions that would have made fighting the virus much more difficult, including diabetes, high blood pressure, and heart disease.

Apple's CEO Tim Cook detailed, in response to a query from CNBC, that they were already seeking ways to work around the coronavirus. Alternative sources for parts had already been tapped to fill in where Chinese manufactures would likely fall behind.

Because of demand impacts in China and a slower than expected manufacturing ramp-up, Apple supplied a wide-swinging guidance for the second fiscal quarter earnings. Apple was predicting between $63 billion to $67 billion in the quarter, with the wider than normal range to account uncertainty around the outbreak.

Recently, Apple RAM supplier SK Hynix has told potentially infected workers to stay home. Apple itself issued a virus warning prior to Wednesday's shareholder meeting.

Apple has reopened about half of its retail stores in China for limited hours, but is restricting the number of customers that can enter the store. Apple assembler Foxconn is paying workers extra to return to plants -- and it isn't clear what capacity the factories can deliver at this time.

While infection rates in China appear to be declining, it isn't clear if this is accurate data. Meanwhile, the virus has taken hold in other countries like Italy, South Korea, and more.

Germany isn't able to keep track of all the infection paths anymore, with cases popping up with no clear chain. Additionally, there is now one case of coronavirus in the United States that it isn't clear where the initial infection came from, nor who may be infected as a result of the patient passing through daily life activities, and the U.S. healthcare system.
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Comments

  • Reply 1 of 34
    This isn’t looking good.  China has done a good job containing the virus (despite criticism) but it’s spread globally seems inevitable.  

    I’m particularly concerned about reports of patients having been cleared (after being infected) then having the virus being detected again later (and sick).  What’s happening?  Is the virus living on surfaces longer than expected and the persons coming in contact with it again?  That doesn’t seem likely.  Does the virus have the ability to go dormant in the body then have a resurgence?  This would mean 2 weeks of isolation isn’t good enough.  Also, all those temperature reading to determine if someone is infected doesn’t mean squat.
  • Reply 2 of 34
    jimh2jimh2 Posts: 579member
    This isn’t looking good.  China has done a good job containing the virus (despite criticism) but it’s spread globally seems inevitable.  

    I’m particularly concerned about reports of patients having been cleared (after being infected) then having the virus being detected again later (and sick).  What’s happening?  Is the virus living on surfaces longer than expected and the persons coming in contact with it again?  That doesn’t seem likely.  Does the virus have the ability to go dormant in the body then have a resurgence?  This would mean 2 weeks of isolation isn’t good enough.  Also, all those temperature reading to determine if someone is infected doesn’t mean squat.
    I'd add all of Europe to that with their open borders.
  • Reply 3 of 34
    As of this moment the stock is in a free fall. Over 5% drop today. Who would expect anything less than sheer blind panic from short term traders and increasingly negative momentum out there?

    Itll probably take the stock a year to recover at this point.
    flyingdpdoozydozen
  • Reply 4 of 34
    lkrupplkrupp Posts: 10,557member
    This isn’t looking good.  China has done a good job containing the virus (despite criticism) but it’s spread globally seems inevitable.  

    I’m particularly concerned about reports of patients having been cleared (after being infected) then having the virus being detected again later (and sick).  What’s happening?  Is the virus living on surfaces longer than expected and the persons coming in contact with it again?  That doesn’t seem likely.  Does the virus have the ability to go dormant in the body then have a resurgence?  This would mean 2 weeks of isolation isn’t good enough.  Also, all those temperature reading to determine if someone is infected doesn’t mean squat.
    So you're buying into the Apocalypse? Are you reading the Book of Revelations? You know what, seventeen million people died in the U.S. during the 1918 Influenza epidemic and we're still here. And from all that I've read Covid-19 has a fatality index of 2.3% and like the Flu it kills mainly the elderly, infants, and those with compromised immune systems. Ebola is 90% and we haven't all died from it yet. COVID-19's mortality rate is less than SARS or MERS. The 1918 Spanish Flu epidemic killed an estimated 50 million people worldwide yet we don't even talk about it anymore. Why? Because of modern medicine. I simply don't buy the hype out there by survivalists, religious zealots, and the various hang-wringers writing furiously on their blogs. Interesting factoid, Costco sells a pallet of food that will provide nutrition for one year. The pallet costs $5K... and they are sold out. Costco sells a huge bucket of Mac-and-Cheese that has a shelf life of 20 years... but it's still in stock. 

    This is just me ranting so don't take it personally. Your post was handy.
    edited February 2020 flyingdpfotoformatStrangeDaysdoozydozen
  • Reply 5 of 34
    tzeshantzeshan Posts: 2,351member
    Microsoft has supply chains? Why no body was talking about it? Microsoft is not a small company. It has one trillion dollar market cap. Where is freedom of speech here? Why no free speech talking about Microsoft manufacturing in China? 
  • Reply 6 of 34
    YP101YP101 Posts: 158member
    Virus is virus.. It mutates when it can. Look at the flu. We can't cure it. because next year some other form to mutates.
    Current problem is we do not have anti-vaccine to help to fight off.
    Once anti-vaccine made, it becomes normal flu type.

    Think about it.. After MERS pandemic, every year USA alone died with flu well above 8,000 and highest close to 30,000. This year alone CDC estimate close to 12,000 death by flu.
    Compare to current COVID19 death ratio, flu is more deadly but not many people panic about it.. Why? because we have anti-vaccine and medicine.

    However still the nature's law, weak gene will be effected and if the weak gene person not properly vaccinated or quick enough take proper medication, result is bad.
    Current medicine pretty good to fight off most of virus but still virus fight back as mutated within our body.
    Such as cancer is very aggressively mutated within our body, we just can't fight off.

  • Reply 7 of 34
    This isn’t looking good.  China has done a good job containing the virus (despite criticism) but it’s spread globally seems inevitable.  

    I’m particularly concerned about reports of patients having been cleared (after being infected) then having the virus being detected again later (and sick).  What’s happening?  Is the virus living on surfaces longer than expected and the persons coming in contact with it again?  That doesn’t seem likely.  Does the virus have the ability to go dormant in the body then have a resurgence?  This would mean 2 weeks of isolation isn’t good enough.  Also, all those temperature reading to determine if someone is infected doesn’t mean squat.
    I disagree that China did a good job. In fact, I would say they waited way too long to react. 
    They ignored and suppressed doctors who brought to their attention the seriousness of the disease before they even knew what it was. 

    There are probably a good deal of carriers here in the US at major cities with direct international 
    flights from known Chinese hotspots.  

    The fear is exactly what you stated, the unknown incubation period of the virus, along with what happens when it mutates. 
    Plus there hasn’t been enough data shared on fatalities in regards to how many fatalities were from known healthy people. 
    Dr. Li Wenliang was not unhealthy and he succumbed to the virus probably due to exposure from a sick patient with a high viral load. 


    StrangeDaysElCapitan
  • Reply 8 of 34
    lkrupp said:
    This isn’t looking good.  China has done a good job containing the virus (despite criticism) but it’s spread globally seems inevitable.  

    I’m particularly concerned about reports of patients having been cleared (after being infected) then having the virus being detected again later (and sick).  What’s happening?  Is the virus living on surfaces longer than expected and the persons coming in contact with it again?  That doesn’t seem likely.  Does the virus have the ability to go dormant in the body then have a resurgence?  This would mean 2 weeks of isolation isn’t good enough.  Also, all those temperature reading to determine if someone is infected doesn’t mean squat.
    So you're buying into the Apocalypse? Are you reading the Book of Revelations? You know what, seventeen million people died in the U.S. during the 1918 Influenza epidemic and we're still here. And from all that I've read Covid-19 has a fatality index of 2.3% and like the Flu it kills mainly the elderly, infants, and those with compromised immune systems. Ebola is 90% and we haven't all died from it yet. COVID-19's mortality rate is less than SARS or MERS. The 1918 Spanish Flu epidemic killed an estimated 50 million people worldwide yet we don't even talk about it anymore. Why? Because of modern medicine. I simply don't buy the hype out there by survivalists, religious zealots, and the various hang-wringers writing furiously on their blogs. Interesting factoid, Costco sells a pallet of food that will provide nutrition for one year. The pallet costs $5K... and they are sold out. Costco sells a huge bucket of Mac-and-Cheese that has a shelf life of 20 years... but it's still in stock. 

    This is just me ranting so don't take it personally. Your post was handy.
    Myself, I’ve been rewatching the Resident Evil movies in preparation.
    ravnorodomjcs2305lolliver
  • Reply 9 of 34
    avon b7avon b7 Posts: 7,508member
    lkrupp said:
    This isn’t looking good.  China has done a good job containing the virus (despite criticism) but it’s spread globally seems inevitable.  

    I’m particularly concerned about reports of patients having been cleared (after being infected) then having the virus being detected again later (and sick).  What’s happening?  Is the virus living on surfaces longer than expected and the persons coming in contact with it again?  That doesn’t seem likely.  Does the virus have the ability to go dormant in the body then have a resurgence?  This would mean 2 weeks of isolation isn’t good enough.  Also, all those temperature reading to determine if someone is infected doesn’t mean squat.
    So you're buying into the Apocalypse? Are you reading the Book of Revelations? You know what, seventeen million people died in the U.S. during the 1918 Influenza epidemic and we're still here. And from all that I've read Covid-19 has a fatality index of 2.3% and like the Flu it kills mainly the elderly, infants, and those with compromised immune systems. Ebola is 90% and we haven't all died from it yet. COVID-19's mortality rate is less than SARS or MERS. The 1918 Spanish Flu epidemic killed an estimated 50 million people worldwide yet we don't even talk about it anymore. Why? Because of modern medicine. I simply don't buy the hype out there by survivalists, religious zealots, and the various hang-wringers writing furiously on their blogs. Interesting factoid, Costco sells a pallet of food that will provide nutrition for one year. The pallet costs $5K... and they are sold out. Costco sells a huge bucket of Mac-and-Cheese that has a shelf life of 20 years... but it's still in stock. 

    This is just me ranting so don't take it personally. Your post was handy.
    While I agree with you that - at this point in time - reality doesn't truly warrant the amount of alarm we are seeing in some areas, we mustn't lose sight of some points.

    There are suspicions that this virus may be bi-phasic.

    The number one difference between the impact of Spanish Flu and any new viral threat is in our ability to travel huge distances in huge numbers. Mankind has never had the levels of mobility it currently has and that makes it very hard to contain the spread over large distances. Add to that the fact that there are so many of us now and it largely becomes impossible to deal with 100%.

    That said, many people who actually have the virus don't go on to develop life threatening conditions so you are right in that there is an element of hysteria in all this.

    That from a purely health related stance.

    The impact on consumption, economies etc is something else.

    Personally, I tend to tread the 'better safe than sorry' path and am in favour of the lock downs and confinements etc, if only not to make the situation even worse.

  • Reply 10 of 34
    flydogflydog Posts: 1,119member
    3% = plummet ????

    geez. anything to attract clicks. 
  • Reply 11 of 34
    roakeroake Posts: 809member
    We really don’t have much in the way of treatment for viruses.  There are no medical cures for viral infections.

    A few, such as the influenza viruses, the herpes family of viruses, and HIV have medications that attenuate them, but there are no cures.  Some vaccines also serve to attenuate the course of viral infections.

    There are some novel therapies that may apply to some of the other viruses, such as a combination of remdesivir and chloroquine that *may* attenuate 2019-nCoV (seems to have activity in vitro, but in vivo results aren’t available).


  • Reply 12 of 34
    flydogflydog Posts: 1,119member

    As of this moment the stock is in a free fall. Over 5% drop today. Who would expect anything less than sheer blind panic from short term traders and increasingly negative momentum out there?

    Itll probably take the stock a year to recover at this point.
    Give us a break. 5% is not "freefall," nor will it take "a year to recover."   And even if it does, who cares. It's doubled in the last year.

    Sound crazy somewhere else.
  • Reply 13 of 34
    flydogflydog Posts: 1,119member

    This isn’t looking good.  China has done a good job containing the virus (despite criticism) but it’s spread globally seems inevitable.  

    I’m particularly concerned about reports of patients having been cleared (after being infected) then having the virus being detected again later (and sick).  What’s happening?  Is the virus living on surfaces longer than expected and the persons coming in contact with it again?  That doesn’t seem likely.  Does the virus have the ability to go dormant in the body then have a resurgence?  This would mean 2 weeks of isolation isn’t good enough.  Also, all those temperature reading to determine if someone is infected doesn’t mean squat.
    The flu has killed 14,000 people in the US this year, and sickened over 25 million.  That's only in the US.  Worldwide, the flu has killed nearly 1 million people this year. 

    In comparison, this has killed 2,462 people on the entire planets, no one in the US.    There is no indication that healthy people with a normal immune system are at risk of death. 


    llama
  • Reply 14 of 34
    carnegiecarnegie Posts: 1,075member
    flydog said:
    3% = plummet ????

    geez. anything to attract clicks. 
    “... continues to plummet.”

    I think a stock (particularly one as well established as AAPL) falling 12% in less than 5 trading days is fairly described as plummeting.
    lolliverSpamSandwichMacPro
  • Reply 15 of 34
    Wgkrueger said:
    Myself, I’ve been rewatching the Resident Evil movies in preparation.
    Highly recommend playing Resident Evil video games. So you know how to dodge someone with coronavirus. (P.S. Love the games).
    edited February 2020
  • Reply 16 of 34
    apple ][apple ][ Posts: 9,233member
    Don't get caught up in the doom and gloom and near term panic due to media hyperbole that is meant to scare people, that's my opinion.

    We've been down this road many times before, and no, the end is not near, the world is not going to end and we are not heading towards a cliff.

    Let the weak hands and those who are easily manipulated sell their shares, while others who are smarter are currently out hunting and looking for opportunities to take advantage of the situation.

    I'll never forget that HUGE drop that AAPL took some years back. I was guilty of being one of the weak hands back then, but I learned my lesson.Never again.

    I am relaxed when it comes to the current situation and it doesn't affect my plans at all. Turn off the fake news, relax and go do something fun, that's my philosophy.


  • Reply 17 of 34
    YP101 said:
    Virus is virus.. It mutates when it can. Look at the flu. We can't cure it. because next year some other form to mutates.
    Current problem is we do not have anti-vaccine to help to fight off.
    Once anti-vaccine made, it becomes normal flu type.

    Think about it.. After MERS pandemic, every year USA alone died with flu well above 8,000 and highest close to 30,000. This year alone CDC estimate close to 12,000 death by flu.
    Compare to current COVID19 death ratio, flu is more deadly but not many people panic about it.. Why? because we have anti-vaccine and medicine.

    However still the nature's law, weak gene will be effected and if the weak gene person not properly vaccinated or quick enough take proper medication, result is bad.
    Current medicine pretty good to fight off most of virus but still virus fight back as mutated within our body.
    Such as cancer is very aggressively mutated within our body, we just can't fight off.


    Just one correction... "anti-vaccine" is the opposite of what you mean, I think.

    "anti-" means "against".

    anti-vaccine means "opposed to or against getting vaccinated". This applies to those people that don't want to get vaccinated.

    You probably just mean "vaccines".
    edited February 2020 MacPro
  • Reply 18 of 34
    apple ][ said:
    Don't get caught up in the doom and gloom and near term panic due to media hyperbole that is meant to scare people, that's my opinion.

    We've been down this road many times before, and no, the end is not near, the world is not going to end and we are not heading towards a cliff.

    Let the weak hands and those who are easily manipulated sell their shares, while others who are smarter are currently out hunting and looking for opportunities to take advantage of the situation.

    I'll never forget that HUGE drop that AAPL took some years back. I was guilty of being one of the weak hands back then, but I learned my lesson.Never again.

    I am relaxed when it comes to the current situation and it doesn't affect my plans at all. Turn off the fake news, relax and go do something fun, that's my philosophy.



    Your viewpoint would be very different if your family members caught the virus, or your business was affected, or you were trapped on a cruise ship for two weeks, in a tiny room. Let's try to remember that there are real people affected by this real threat. Perspective is important, but downplaying too much can also be dangerous.
  • Reply 19 of 34
    apple ][apple ][ Posts: 9,233member
    apple ][ said:
    Don't get caught up in the doom and gloom and near term panic due to media hyperbole that is meant to scare people, that's my opinion.

    We've been down this road many times before, and no, the end is not near, the world is not going to end and we are not heading towards a cliff.

    Let the weak hands and those who are easily manipulated sell their shares, while others who are smarter are currently out hunting and looking for opportunities to take advantage of the situation.

    I'll never forget that HUGE drop that AAPL took some years back. I was guilty of being one of the weak hands back then, but I learned my lesson.Never again.

    I am relaxed when it comes to the current situation and it doesn't affect my plans at all. Turn off the fake news, relax and go do something fun, that's my philosophy.



    Your viewpoint would be very different if your family members caught the virus, or your business was affected, or you were trapped on a cruise ship for two weeks, in a tiny room. Let's try to remember that there are real people affected by this real threat. Perspective is important, but downplaying too much can also be dangerous.
    I don't think that my viewpoint would be much different if any of those things happened, because I am looking at the big picture.

    I am talking specifically about the market, not about any personal dealings or experiences that somebody might have had with the virus. My point is that even in the hypothetical situation that somebody I knew caught the virus, am I going to turn around and sell my Apple shares? Nope. That would have zero effect on my strategy.
  • Reply 20 of 34
    slurpyslurpy Posts: 5,381member
    As of this moment the stock is in a free fall. Over 5% drop today. Who would expect anything less than sheer blind panic from short term traders and increasingly negative momentum out there?

    Itll probably take the stock a year to recover at this point.
    Unless you're planning to imminently sell your AAPL, this dip will be irrelevant in the big picture. If anything, an opportunity to add to your position. The market acts in extreme, hyperbolic ways during these situations 
    allmypeoplellama
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