As the COVID-19 virus, or coronavirus, unfolds, financial technology provider WEX Inc. has cut its Q1 revenue outlook. The firm said in an announcement it has been keeping a close eye on the coronavirus situation and assessing its effect and that “the health and safety of our employees, partners, and customers remain top of mind and our thoughts are with those who have been affected.”
WEX says it now foresees Q1 2020 revenue to be roughly 2 percent to 3 percent under the revenue guidance provided in the past on Feb. 13. It noted the forecast is based on information that management has access to as of now and is mainly because of the impact on the travel business as well as “minor” over-the-road business impact. And it pointed out that the forecast assumes February’s trends will carry over into March.
The company said in the announcement, “WEX’s underlying business trends remain strong as our US Health and Corporate Payments businesses are performing better than expected. However, travel, and to a lesser extent shipping activity and fuel prices, are being negatively impacted by the coronavirus.”
The firm also noted that the effect of the COVID-19 virus on fiscal 2020 and Q2 results “cannot be reasonably estimated at this time beyond what we describe above given the uncertainty regarding the magnitude, duration, and global reach of the situation.” It said that it will offer “further updates on our first quarter earnings call.”
The news sent WEX stock down as much as 3.7 percent on the New York Stock Exchange, although shares later rebounded to close at $182.74, up 0.13 percent for the day. However, those slim gains paled in comparison to the broader market, where the Dow Jones Industrial Average rose 1,173.45, or 4.53 percent.
In separate coronavirus news, Qorvo, a radio chips maker for iPhones, cut its fourth-quarter revenue expectations from its forecast band of $800 million to $840 million down to $770 million. The company’s results for the fourth quarter are forecast to come out on May 5.
Qorvo said per a past report that the coronavirus “has impacted the smartphone supply chain and customer demand more than anticipated.” However, it noted it is still difficult to foresee the virus’s complete effects with “the magnitude, duration and geographic reach of the outbreak.”