Photo | TMS Aerial Solutions
Boston Scientific's Marlborough headquarters
February 26, 2020
Coronavirus' financial impact hitting Central Mass.
Photo | Grant Welker
IPG Photonics is expanding its Oxford office campus.
By Grant Welker
Central Massachusetts businesses with broad geographic reaches are feeling the effects of the spread of coronavirus.
Local public companies were among those seeing their stock prices plummet this week, while the timing of many companies announcing their quarterly earnings this month has given the public a look at how companies are beginning to expect to take a financial hit from coronavirus, even before this week's strong public trading downturn.
The outbreak's financial impact comes as China halts much of its manufacturing production, workers are kept home, restaurants and stores shuttered, and travel restricted.
Oxford laser manufacturer IPG Photonics said in an earnings report Feb. 13 it expects roughly $45 million in reduced revenue from the outbreak.
"Prior to the government-extended Lunar New Year holiday, there were signs that business in China was firming, with order flow having picked up in December and January," Valentin Gapontsev, IPG's CEO, said in a statement. "However, ongoing business disruption related to the novel coronavirus outbreak makes forecasting our business in China and the impact on global demand very challenging at this point. China is a large and important market for IPG, with repercussions for other markets, and we continue to monitor the situation closely."
Marlborough medical device company Boston Scientific said in an earnings report Feb. 5 — before the death toll rose sixfold to what it is today — it expected coronavirus to hit its sales by $10 million to $40 million. There could also be a disruption to its supply chain, the company said.
Some of the largest Central Massachusetts public companies, particularly those possibly relying on China for production of parts, have seen their stock fall along with the rest of the market this week.
Acton medical device manufacturer Insulet, which announced earnings at the close of trading Tuesday, has seen its stock fall 7.3% on the Nasdaq. The company said a significant portion of its Omnipod Systems are made in China.
Milford law equipment manufacturer Waters Corp. fell 6.0% on the New York Stock Exchange, and Shrewsbury retail parent company TJX Cos., which has stores in Europe and Australia but not Asia, dropped 5.7% on the NYSE. IPG, whose stock has already been flat in the past year, has been down 5.2%, and Boston Scientific by 2.7% on the NYSE.
As a whole, Nasdaq was down 610 points, or 6.4%, on Monday and Tuesday. The Dow Jones Industrial Average also fell 6.4% on Monday and Tuesday.
This week's stock market dive came as the U.S. Centers for Disease Control and Prevention said Tuesday the spread of coronavirus in the United States is now inevitable.
"As more and more countries experience community spread, successful containment at our borders become harder and harder," Dr. Nancy Messonnier, the director of the CDC's National Center for Immunization and Respiratory Diseases, said in a conference call with reporters.
"Ultimately, we expect we will see community spread in this country," Messonnier said. "It's not so much a question if this will happen anymore but rather more a question of exactly when this will happen and how many people in this country will have severe illness."
There is no vaccine to prevent coronavirus or medication to treat it, Messonnier said.
The World Health Organization reported more than 2,700 deaths worldwide on Tuesday, primarily in China. More than 80,000 people worldwide are believed to have the disease
Other Central Massachusetts public companies reported their quarterly earnings early in the month may have done so just before the coronavirus was starting to make more of an impact. Waters Corp., for example, which announced earnings Feb. 3, mentioned the outbreak only in passing as part of its boilerplate cautionary language on forward-looking statements.
AbbVie, the Illinois pharmaceutical company with a major facility in Worcester, didn't report any expected financial hit but has been involved in another way. The company said it donated Aluvia, a treatment for HIV, as what it called an experimental option to treat coronavirus.
TJX didn't mention the outbreak in its earnings report Wednesday. Framingham energy company Ameresco and Westborough retail company BJ's Wholesale Club will report earnings next week.
WBJ Web Partners
Most Recent
Most Recent
0 Comments