Stormy weather: Hurricanes will hurt 3rd quarter profits
Two transportation firms said their profits will be dampened by Hurricane Ike and other weather events during the third quarter.
CSX Corp. said recent storms in the Gulf Coast and Midwest are expected to reduce third quarter operating income by $40 million to $50 million and earnings per share by 6 cents to 8 cents. The impact is primarily related to asset writedowns, business interruption and reroute expenses.
Tank barge company Kirby Corp. said Hurricanes Gustav and Ike will reduce its third quarter profit by about 8 cents to 9 cents per share, or more than $4 million.
The company still expects to do better in the third quarter than it did last year, earning between 73 cents or 76 cents compared to 64 cents in the third quarter of 2007.
But it said earnings will be reduced because of the havoc the storms inflicted on the refineries and other facilities of its customers and closed waterways, which prevented some Kirby tugs and barges from operating normally.
Joe Pyne, Kirby’s president and chief executive officer, said, “Although none of Kirby’s active tank barges and towboats were materially damaged by the hurricanes, a large portion of them were idled. Because of our customers’ inability to produce products, which require marine transportation movements in the Houston and Port Arthur/Beaumont areas, coupled with the closure of the Gulf Intracoastal Waterway, the impact of Hurricane Ike was significantly greater than Hurricanes Katrina and Rita in 2005. We do anticipate a return to strong pre-hurricane operating fundamentals after customer facilities begin operating at normal levels.'
Stormy weather: Hurricanes will hurt 3rd quarter profits
