More Than 180 Companies Say They’ve Been Hit by China Lockdowns
Article content
(Bloomberg) — China’s Covid Zero policy is having far-reaching effects on global companies, with automakers, tech firms, fashion houses and even breweries feeling the brunt as the country’s weeks-long lockdowns paralyze major industrial hubs and disrupt supply chains.
More than 180 companies around the world have mentioned terms including “China” and “lockdowns” in their first-quarter earnings calls or financial statements, according to a Bloomberg News analysis of transcripts and filings. It’s a significant jump from fewer than 50 companies in the previous quarter, and the list is still growing as more firms report financial results in the days and weeks ahead.
Advertisement 2
Article content
Automakers
Toyota Motor Corp., based in Japan
Lowered May production plan to 700,000 vehicles from 750,000 due to lockdown impactSuspended operations of some production lines in Japan from May 16-May 21 because of Shanghai lockdown
Tesla Inc., based in Texas
Shanghai plant closed down for three weeks in April. The factory, which typically ships around 60,000 cars a month, delivered only 1,512 vehicles last monthLogistics issues continued in May
Honda Motor Co., based in Japan
Operating profit for the year through March missed estimates due to challenges including China lockdowns and rising energy and material costsOne of the company’s domestic production lines stopped operation due to Shanghai lockdownExpects to see impacts from restrictions to continue through the end of May
Advertisement 3
Article content
Tata Motors Ltd., based in India
Challenges including China lockdowns are expected to limit sales volume improvement in the June quarter, potentially resulting in negative free cash flow
Volkswagen AG, based in Germany
Lockdowns have put “a lot of pressure” on supply chains, slowed production and temporarily shut operations at suppliers; production is still at low levels in early MayChina’s overall market recorded a decline in the first quarter, with deliveries falling 24%
Ford Motor Co., based in Michigan
Has about 50 key suppliers in Shanghai and had to spend “a lot of money” on securing premium freight and other channels to work around restrictionsLoss in China widened by $38 million in the quarter, wholesales decreased 15%, revenue fell 32%
Advertisement 4
Article content
Medical and Health Care
Dentsply Sirona Inc., a dental and medical equipment manufacturer based in North Carolina
China, which accounted for 5% of 2021 sales, represents more than half the regional headwinds facing the firmImpact on sales in March and April to last throughout the year
Becton Dickinson & Co., a New Jersey-based medical device manufacturer
Growth in China, its second-largest market, halved last quarterImpact of Covid restrictions could linger this quarter
Danaher Corp., a medical and industrial products manufacturer and services provider based in Washington, D.C.
Diagnostics branch saw patient volumes fall in China in the quarter and April as hospitals locked down and focused on CovidExpects a headwind of 2% to 3% on second-quarter revenue growth
Advertisement 5
Article content
Zai Lab Ltd., a Shanghai-based pharmaceutical company
Firm likely to see difficulties in the second quarter in China due to “access difficulties” caused by restrictions
Illumina Inc., a California-based company that produces genetic analysis products
Firm expects headwinds from China — which accounts for 10% of revenue — to slow growth by 3% in second quarterGreater China first-quarter revenue was flat as clinical demand in hospitals was offset by Covid restrictions
Zimmer Biomet Holdings Inc., an Indiana-based medical equipment manufacturer
Net sales in Asia Pacific declined 13% last quarter, primarily due to the lockdowns
Zoetis Inc., a New Jersey-based animal medicines and vaccines developer
Second-quarter top line to fall slightly from previous quarter as restrictions temporarily pressure day-to-day business in some supply chain activities
Advertisement 6
Article content
Fashion and Cosmetics
Shiseido Co., a cosmetics brand based in Japan
Sales in China plunged 21% year-on-year in the quarter mainly due to low store trafficSome outlets were shut, while some others had opening hours cut short
LG Household & Health Care Ltd., a Korean household and personal care products manufacturer
Beauty businesses struggled to grow in the first quarter due to political and economic challenges in China, which accounts for half the segment’s salesSales of beauty products plunged 40% in the quarter as restrictions battered store traffic and travel retail channels”China’s economy faced the worst downward pressure in years due to the Zero-Covid policy,” the company said in a May 11 statement. “The market contraction due to the strengthened lockdown measures in China is still continuing.”
Advertisement 7
Article content
Under Armour Inc., a clothing company based in Maryland
Store closures and restricted hours in China caused “significant reductions in retail traffic”Lockdown measures also affected transportation, causing delivery delaysChallenges including Covid disruptions saw Asia Pacific revenue plunge 14% in the quarter
PVH Corp., an apparel company based in New York
China lockdowns and Hong Kong restrictions led to temporary store closures and pause of online deliveries
Home, Office and Other Consumer Products
Fujifilm Holdings Corp., a Japanese camera, imaging and document products provider
Delays in equipment supply and installation for its office solutions business due to partial shutdown of factories in China, tight supply of semiconductors and other parts, as well as logistics disruptions
Advertisement 8
Article content
Olympus Corp., a Japanese camera and imaging products manufacturer
Lockdowns, particularly in Shanghai, affected the group’s supply chain and global logistics flows
Sony Group Corp., a Japanese manufacturer of electronics products
Cut its PlayStation 5 sales forecast to about 18 million units this fiscal year from a previous estimate of 22.6 million, citing supply-chain complications
Daikin Industries Ltd., a Japanese air conditioning equipment manufacturer
Business in China was “greatly affected” by lockdowns in Shanghai and other citiesSome of the company’s suppliers in China that produce electronic components and semiconductors were out of operation until around April 20Distribution center in Shanghai couldn’t distribute products to dealers across the country
Advertisement 9
Article content
Monster Beverage Corp., an energy drinks maker based in California
Net sales in China fell 8.9% in the quarter
Budweiser Brewing Co. Apac Ltd., based in Hong Kong
Firm was “disproportionately impacted” in March, with sales volume declining 4.3% as the company has a strong presence in provinces most affected by lockdownsThe firm, which has about 30 breweries across China, didn’t see significant supply chain disruptions as they are located close to its wholesalersA couple of operations are running on the so-called closed loop environment, where workers are shuttled between factories and on-site or nearby accommodation each day instead of returning to their residences
Industrial Materials, Components
Minebea Mitsumi Inc., a Japanese manufacturer of parts and devices for telecommunications, aerospace, automotive and household electrical appliance industries
Advertisement 10
Article content
Missed operating income forecast in the electronic devices and components segment for the year through March, mainly due to shutdown of some plants in China and shortage of semiconductorsShanghai factory production was particularly impacted in April and May
Microchip Technology Inc., an Arizona-based semiconductor maker
Supply chain partners and some customers were “adversely impacted” in March, April and MayHad to redirect manufacturing activities and sourcing to other locations not affected by the lockdowns
Mettler-Toledo International Inc., an Ohio-based weight measuring equipment supplier
Its business and supply chain could be significantly affected, including Shanghai’s lockdown, where the company conducts manufacturing and some other businesses
Advertisement 11
Article content
Celanese Corp., a Texas-based chemical and specialty materials producer
Plant near Shanghai was shuttered for a few weeks; some employees were locked down and had to work from homeWhile able to cover the affected production elsewhere, the firm saw more impact from problems around warehouses and logistics because materials weren’t getting in or out of ports in Shanghai
Micro-Star International Co., a Taiwanese computer parts manufacturer
One Chinese subsidiary suspended operations from April 8 and only resumed recently
Novatek Microelectronics Corp., a Taiwanese circuit manufacturer
Lockdowns in major Chinese cities have impacted demand for the firm’s products and disrupted its supply chain
SCG Packaging PCL, based in Thailand
Advertisement 12
Article content
Strict lockdowns in major cities led to disruptions at several seaports, factories and also in the supply chainPackaging paper exports declined because of China’s economic slowdown
Fuji Seiki Co., a Japanese manufacturer of plastic molds and moldings systems
Delayed filing its first-quarter earnings report amid Shanghai lockdownEmployees at its Shanghai unit haven’t been able to go to work since April 1 and so weren’t able to prepare a financial statement for March
Aptiv Plc, an Ireland-based vehicle components manufacturer
Locked down areas include regions where the company has operations, causing production interruptions which adversely affected sales and profitability
Parker-Hannifin Corp., an Ohio-based manufacturer of motion control products
Advertisement 13
Article content
Had a number of facilities fully shut down in China, resulting in an estimated $100 million impact on sales in the June quarter
Air Products & Chemicals Inc., a Pennsylvania-based manufacturer of gases
Restrictions have modestly impacted customer demand and plant efficiency, as well as increased supply chain costs”We are very concerned about the potential impact of Covid-related restrictions in China” for the second-half, Chief Executive Officer Seifi Ghasemi said on a May 5 call
Waters Corp., a Massachusetts-based provider of liquid chromatography products and services
Lockdowns could have negative impact on sales growth if restrictions continue for a prolonged period
Ingersoll Rand Inc., a North Carolina-based firm which makes compression equipment
Advertisement 14
Article content
Shanghai distribution center affected, although the plant has recently been allowed to resume workThe company, which relies on China for roughly 15% of sales, is taking “a prudent view” for the coming quarters
Nidec Corp., a manufacturer of small precision motors for commercial and industrial products
Sales of small precision motors declined sharply, with estimated lost revenue of about $47 millionImpact was particularly large at the end of March, because it had to close its factory for almost a weekSupply chain was “completely frozen” due to the closure; couldn’t make many big, last-minute sales in March
TE Connectivity Ltd., a Pennsylvania-based manufacturer of electronic components for the telecommunications, automotive, computer and aerospace industries
Advertisement 15
Article content
Lockdowns in China, which accounts for about 20% of sales, to lead to a headwind of about 3% on June-quarter salesFactories in China aren’t operating at full production, and has encountered problems delivering products to customers
General Electric Co., a Massachusetts-based manufacturer of components for aircrafts, cars and energy industries
Hit both from demand and output perspectives last quarter, particularly by Shanghai lockdown
Avery Dennison Corp., a California-based maker of tickets, tags and labels
Shanghai lockdown could reduce materials business revenue by about $20 million
Logistics and Shipping
Expeditors International of Washington Inc., a logistics company based in Washington
The pandemic, including China lockdowns, disrupted supply chains which significantly affected operations and financial resultsSeeing more vessels anchored at port, further reducing capacity and increasing dwell times at destination
Royal Caribbean Cruises Ltd., a Florida-based cruise company
Has redeployed ships planned for China, which remains closed to cruising
©2022 Bloomberg L.P.
Advertisement
Share this news on your Fb,Twitter and Whatsapp
Times News Express:Latest News Headlines
Times News Express||Health||New York||USA News||Technology||World News