Superstorm Sandy was one of the most expensive storms in U.S. history. Insurance companies are likely to bear the brunt of its impact on corporate America. Insured losses could run as high as $20 billion.
The pain will stretch across other businesses, too. Retailers lost nearly $4 billion in sales the week of the storm, about 20 percent of their usual sales.
Here are four industries where companies and financial analysts are warning investors to expect profits to take a hit.
But keep in mind that Sandy’s overall impact on corporate earnings will be more limited, says Deutsche Bank strategist David Bianco. After Hurricane Katrina struck in August 2005, profit for companies in the Standard & Poor’s 500 index still grew 12 percent that quarter. At least some of the lost sales will be recouped from rebuilding.
Businesses, homes, cars and boats: Insurance adjustors are calculating all of the damages. Auto insurer Progressive (PGR), may be among those to earn less in the fourth quarter. Stifel Nicolaus ﬁnancial analyst Meyer Shields lowered his earnings estimate to 30 cents per share, down from 37 cents before the storm.
CVS Caremark (CVS) shut more than 1,100 of its 7,400 stores – nearly 15 percent – at the peak of the storm. The drugstore operator says the lost sales will slice a cent off its fourth-quarter earnings. Macy’s also cautioned that Superstorm Sandy will temper the start of the holiday season.
Atlantic City, N.J., is dealing again, but gamblers may stay away as the city recovers. That, combined with fewer visitors in Las Vegas, means Sterne Agee analyst David Bain expects Boyd Gaming (BYD) to lose 10 cents per share in 2012. He earlier predicted a proﬁt of 7 cents.
New York is one of the biggest hubs for Delta Air Lines (DAL), which canceled more than 3,500 ﬂights last month. That will lower revenue by $45 million in October and proﬁt by $20 million. But that’s a fraction of the $9.9 billion in revenue and $1 billion in net income it had last quarter.Associated Press