The economic toll of China's viral outbreak continues to mount for corporations based in and outside of the country as factories are shuttered and consumer behavior is altered measurably.
On Thursday Alibaba, the first major Chinese company to report quarterly earnings since the emergence of the coronavirus, said the outbreak "is having significant impact on China's economy ... potentially affecting the global economy."
CEO Daniel Yong Zhang said the overall revenue growth rate at Alibaba will be negatively affected this quarter, which ends in March. Some of its businesses may have negative revenue growth.
The outbreak might spur adoption of long term consumer behavioral changes, like working remotely and ordering online, particularly in less developed parts of China, Zhang said. That's what happened in 2003 after the SARS epidemic, he said.
Alibaba is the equivalent in China of Amazon.com, only bigger. Despite supply chain problems that are affecting almost every global corporation that operates in the country, Alibaba is in a unique position to help people during the crisis and in some ways, benefit.
"So people now work remotely from home. People buy foods, buy fresh products, buy groceries, buy necessities from home," said Zhang. "I think this is a – this is a very big challenge that – the crisis is a very, very big challenge to the society, but also as I said in my remarks, give people a chance to try a new way of living and new way of work."
Yet whatever benefit Alibaba sees, there are clear risks for the company.
While orders for food and other necessities are rising with people unwilling to leave their homes, sales of other goods, like electronics and clothing, are deteriorating, the company said Thursday.
There is "reduced willingness on the part of consumers to make those kinds of purchases at the height of the epidemic," Zhang said.
Transnational companies in North America, Europe and elsewhere are also reporting damage.
Ralph Lauren, the luxury clothing and apparel maker in New York, warned Thursday that the virus will cut into fourth-quarter sales by an estimated $55 million to $70 million. One of six factories operated by PepsiCo in China has not re-opened. Hilton has closed 150 hotels there.
Two-thirds of the stores owned by Ralph Lauren in China have been closed over the past week and the company said that supply chain disruptions could affect customers outside of China.
Hilton Worldwide Holdings Inc. said Wednesday that it expects a $25 million to $50 million hit to annual earnings, but that is presuming a three- to six-month outbreak and a three- to six-month recovery period. The company based its forecast, in part, on past experience with viral outbreaks like SARS.
Those combating the outbreak will not give any estimates regarding its duration.
"'I can't stress enough that this is really preliminary, that this is a sort of evolving situation," Hilton CEO Chris Nassetta told investors in a conference call.
PepsiCo said Thursday that its factory in Wuhan, the epicenter of the outbreak, remains closed, though its five other factories re-opened after the Lunar New Year holiday.
The virus is not expected to have a material impact on profits, Pepsi said. In the fourth quarter, Pepsi's China, Australia and Asia Pacific unit made up 4% of total revenue. North America accounts for 59%.
But the company's guidance for 2020 organic revenue growth of 4% was on the low end of previous forecasts.
"The world is certainly a volatile place,"' PepsiCo Chief Financial Officer Hugh Johnston said in a conference call with investors.
The death toll from the virus in China reached 1,367 Thursday, with confirmed cases climbing to 59,804.
Shares of all three companies slid Thursday despite a strong economic performance from each of them in the most recent quarter.
Hubei Province, center of the novel coronavirus outbreak, reported 14,840 new confirmed cases and 242 new deaths Wednesday, the highest daily increases so far, after the diagnosis criteria for confirmed COVID-19 cases were further loosened for timely treatment of more patients.
The Hubei Provincial Health Commission said Thursday the number of new cases included 13,332 clinically diagnosed cases, which now have been seen as confirmed cases.
The 242 new deaths also include 135 people who were only clinically diagnosed.
The latest report brought the total confirmed cases in the hard-hit province to 48,206. The province had a total of 1,310 deaths as of Wednesday. The provincial capital Wuhan, with 32,994 total confirmed cases and 1,036 deaths, accounted for the majority of the provincial tally.
The commission said the province now has 9,028 suspected cases of infection, after 3,317 suspected cases were ruled out on Wednesday.
The province also saw 3,441 patients discharged from hospital after recovery as of Wednesday. Among the 33,693 hospitalized patients, 5,647 were still in severe condition and another 1,437 in critical condition.
CLINICAL DIAGNOSIS EXPLAINED
Clinically diagnosed cases are unique to Hubei statistically. The inclusion of those cases drives the surge in the number of new confirmed cases.
Any suspected cases with pneumonia-related computerized tomography (CT) scan results are counted as clinically diagnosed cases, according to the latest version of the diagnosis and treatment scheme released by the National Health Commission. Experts said that would include those who had yet to be tested positive in the nucleic acid testing (NAT), which previously was the threshold for hospitals to receive patients and give treatment.
The provincial health commission said the diagnosis criteria revision was made to give those who had been clinically diagnosed the timely and standard treatment in order to further improve the treatment success rate.
"These 'yet-to-test-positive' patients could easily spread the virus in society. Categorizing them as confirmed cases will lead to quarantine and hospitalization, which would be good for both the patients and the public," said Zeng Guang, chief epidemiologist of the Chinese Center for Disease Control and Prevention.
"It is the right step to stop the spread of the virus," Zeng said.
Japan's health ministry said Thursday 44 more people on a cruise ship quarantined near Tokyo have tested positive for the virus that causes the new disease known as COVID-19.
The Diamond Princess, which is still carrying about 3,500 passengers and crew members, now has 218 people infected with the virus out of 713 people tested since it entered Yokohama Port on Feb. 3, the largest cluster of infections outside China.
In all, Japan has 247 confirmed cases of the new disease that apparently started in Wuhan, a city in central China, in December.
Health Minister Katsunobu Kato said five of the patients sent to hospitals earlier have severe symptoms and are on artificial respirators or under intensive care.
Kato also said the government has decided to allow passengers older than 80 to get off the ship after testing negative for the virus. He said results of tests on about 200 eligible passengers are underway, and those with chronic health problems or in cabins without operable windows will be given priority.
Kato said the measure is to reduce health risks for passengers stuck in rooms under difficult conditions. Those who are released will be asked to stay at a designated facility through the end of the quarantine period.
"We are doing our utmost for the health of crew members and passengers who remain on the ship," Kato told a news conference.
Some experts have questioned Japan's strategy of isolating the passengers and crew in a potentially virus-affected environment on the ship while the disease is already slowly making its way into the country.
"On the ship, infections are getting very dense," said Shigeru Omi, an infectious disease prevention expert and former regional director for the World Health Organization. "It's like we are seeing a very condensed version of what could happen in a local community."
Omi, who currently heads the Japan Community Health Care Organization, said those people who have tested positive for the virus are "only a fraction" of what could already be spreading outside of the ship. "We should assume that the virus has already been spreading in Japan," he said.
The Supreme People's Procuratorate announced Thursday that it has decided to arrest Hu Huaibang, ex-chairman of the China Development Bank (CDB), for suspected bribe-taking.
The case of Hu, also former secretary of the CDB committee of the Communist Party of China, had been investigated by the National Supervisory Commission and transferred to the procuratorate for further investigation and prosecution.
The rise in the number of recovered patients infected with the novel coronavirus is a positive signal that the current treatments are getting results, said Guo Yanhong, an official with the National Health Commission (NHC).
A total of 5,911 infected people had been discharged from hospital after recovery by the end of Wednesday, the NHC said in a daily report.
Each day since Feb. 7 has seen some 500 patients walk out of hospital after recovery, Guo said at a press conference held in Beijing Thursday afternoon.
A preliminary analysis of 597 discharged cases found that about 90 percent of the cured patients had mild symptoms while 10 percent were those in severe or critically ill condition, she noted.
"Even severe and critically ill patients can be cured and discharged from hospital after careful treatment," Guo said.
Citing the analysis, Guo said that the 597 infected were hospitalized for an average of some 10 days before being discharged.