After causing death and destruction over the southern part of the U.S. and on the Caribbean island of Puerto Rico, hurricanes Harvey, Irma and Maria are dampening corporate quarterly profits in the U.S.
While the powerful storms during August and September hit insurers who now must pay for damaged property in the billions of dollars, many manufacturers, banks and retailers are also feeling the hit from the storms.
Over 50% of the companies in the S&P 500 reporting results for the third quarter the past few weeks, including Delta Air Lines, Costco and Harley-Davidson, have said during investors’ conference calls that the hurricanes harmed business to a certain degree.
The CFO of Harley-Davidson said the company estimates that the hurricane impacted business by between 1.5% and 2% for retail sales during the third quarter.
The storms were part of the worst hurricane season in the Atlantic in more than 10 years, damaging or destroying homes, businesses as well as public infrastructure, while killing more than 200 people and putting a halt to normal day to day economic activity.
Senior executives from 48 of the S&P 500 companies told investors their companies had been affected negatively by the recent hurricanes.
Twelve or more companies, including Abbott Laboratories and U.S. Bancorp, also have said that their businesses were hurt by an earthquake in Mexico during September that killed 369 people. Mexico is a huge market for U.S. companies.
The American International Group estimated that losses before taxes of close to $1 billion for storms Harvey and Irma, as much as $700 million for Maria and other catastrophe losses such as the earthquake in Mexico of approximately $150 million.
Travelers Cos. on Thursday said it had recorded catastrophe losses of $700 million from Harvey and Irma, though its profit for the quarter dropped less than feared on Wall Street.
S&P 500 companies are expected on average to have increased non-GAAP per share earnings by over 4.2% during the just ended third quarter, which is the slowest growth in the last year, according to data compiled by an online research firm.
Excluding insurance companies, which are thought to have taken a hit on average of a drop of 63.3% in quarterly profits, earnings for S&P 500 companies are estimated to increase 6.9%.
During September, the lingering effects of Harvey and Irma hurt activity in factories, and blunted any rebound in industrial production in the U.S., said the Federal Reserve on Tuesday.