Stable service provider cash flows should be a valued quality in challenging economic times

摘要

As companies communicate or revise financial expectations for 2020 in the context of a slowing global economy and Covid-19, we examine how some business models may be affected. Telecommunications and some other service providers stand out as likely to weather the turbulence. Omdia tracks many technology, media, and telecoms (TMT) financials. Revenue growth for leading internet platform companies, while far outpacing the global economy, had already shown signs of slowing in 2019, primarily because of privacy concerns and increased regulatory scrutiny. This was prior to escalated/heightened global concerns over the Covid-19 coronavirus and associated subsequent dislocations across the supply chain. Apple had forecast revenue of $63–67bn for the first calendar quarter of 2020 but confirmed on February 17, 2020 that it did not expect to meet that forecast, citing iPhone global supply constraints and lower demand within China. Microsoft has also announced that its Personal Computing segment (Windows and Surface) is more negatively impacted. Advertising revenue streams seem likely to fall sharply as major events are cancelled, according to ITV, for example. These are unlikely to be the only companies to have initially underestimated the likely impact of an already existing slowdown in the global economy, intensified by the spread of the virus.