The Market Rout Is About More Than Coronavirus
Many big European companies are struggling already, as Thursday’s results showed. The virus may have forced a selloff that was overdue anyway.
Seeing red.
Photographer: Carl Court/Getty Images EuropeEuropean companies were running to stand still even before they started worrying about the impact of the coronavirus. If investors weren’t preoccupied with the disease, the corporate sector’s weak growth, poor profitability and tendency to do overpriced acquisitions would be front of mind.
Ad group WPP Plc failed to grow underlying sales last year and was guiding for another flat performance in 2020 even before the coronavirus spread. Brewer Anheuser-Busch InBev SA made less profit in the last three months of 2019 than analysts expected. Reckitt Benckiser Group Plc’s new chief executive officer completed a kitchen sinking on Thursday by taking a 5 billion-pound ($6.5 billion) writedown on a $17 billion acquisition led by his predecessor. He also admitted that profit margins — fueled by one cost-cutting deal after another — were unsustainable.