Shares of II-VI (NASDAQ:IIVI) have plunged today, down by 12% as of noon EDT, after broader markets tanked due to ongoing fears around the novel coronavirus outbreak. The COVID-19 respiratory illness continues to spread around the world, with economic risks mounting for companies across sectors.
Investors are worried that the outbreak could potentially lead to a global recession, and some tech companies face greater exposure because many of them have supply chains and operations concentrated in China. In II-VI's case, the maker of optoelectronic components and devices does have production facilities in China, as well as other countries that have been hit hard, such as Germany. II-VI also recently closed its acquisition of Finisar, which likewise has manufacturing operations in China, increasing II-VI's exposure even further.
More broadly, the steep plunge in crude oil prices is only adding to investors' unease.
When II-VI reported fiscal second-quarter results last month, it warned that revenue in the current quarter would take a hit of at least $50 million due to the coronavirus.
On the conference call with analysts, CFO Mary Raymond provided some detail:
The [coronavirus] effects are potentially broad reaching. Not only are many of our factories and employees dealing with a longer Chinese New Year holiday, there are also potential effects on the overall supply chain. We expect to be moving back to full strength over the next several weeks. We have, therefore, included a minimum of $50 million revenue reduction in our guidance to account for these conditions.
Sales in the current quarter are expected to be $550 million to $600 million.