Polar Vortex Chilled U.S. Profits in First Quarter
By Thomas Black and Richard Clough Apr 1, 2014 11:41 AM ET
The polar vortex that blanketed big swaths of the U.S. with snow this winter is also giving cover to companies seeking to explain why earnings rose last quarter at the slowest pace in almost two years.
Freezing temperatures and mountains of snow in the first three months of 2014 kept shoppers indoors, grounded flights and made it harder for shippers to fill product orders. As a result, Macy’s Inc. shut 244 stores for at least part of January, Union Pacific Corp.’s trains ran 9 percent slower and Delta Air Lines Inc. canceled 8,000 flights in January and February.
Companies already blaming the weather for poor performance include FedEx Corp., General Motors Co. and McDonald’s Corp. More will probably attribute weakness to the cold, even in cases where management may bear part of the responsibility, said William Stone, chief investment officer of PNC Wealth Management in Philadelphia, which manages $128 billion.
“For many of these businesses there’s a true impact,” Stone said in a phone interview. “The skill is to separate how much of it really is the weather and how much is them taking some liberty to blame other execution problems on the weather.”
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http://www.bloomberg.com/news/2014-04-01/polar-vortex-chilled-u-s-profits-in-first-quarter.html
