The three-punch wallop of hurricanes Harvey, Irma and Maria has brought destruction across a wide swath of the Caribbean and southern U.S. On earnings calls, executives have been sharing how the storms affected their businesses and the economy. The following commentary was collected from Sept. 14 through Sept. 20.
Thomas Wilson, chief executive officer, insurer Allstate Corp.: “Good thing in Florida, building codes really worked. And so a lot of damage was avoided, but we’re not out of the woods. We -- 10 percent of the land is on the coast, 40 percent of the people live there, 40 percent of the people got a lot of money and they built that stuff. We are worried about this, so we need a different plan. The federal government spends about $42 billion a year on this, it’s over $300 per household per year and we have collective amnesia.” ( Sept. 19)
Joseph Puishys, CEO, Apogee Enterprises Inc., which develops glass products: “Building codes have improved in both the Houston area and in South Florida,” since previous hurricanes. “Most of the glass has survived the storms. It’s primarily a flooding issue on the main floors, which on a construction site can make a mess. But once you get the contractors back in, we’ll follow the steel and the cement guys right up the building. So we don’t anticipate significant business from broken glass, so to speak, and the codes have already been quite stringent.” ( Sept. 19)
Brian Magstadt, chief financial officer, Simpson Manufacturing Co., which makes wood construction products: “A lot of the structures or the building codes were strengthened after 1992 Hurricane Andrew to create safer, stronger structures.” ( Sept. 19)
A. Jayson Adair, CEO, Copart Inc., a vehicle-auction company: “Not something that is going to make a huge negative financial impact in the company in the Florida area. But as for Houston, there will be some extraordinary costs that are coming out of that just like we saw in Hurricane Sandy and Hurricane Katrina.” ( Sept. 20)
J. Patrick Gallagher, CEO, Arthur J Gallagher & Co., an insurance brokerage: “The economy, I will definitely say that both of them will be a positive, unfortunately. The construction industry is going to have a boom, all the supply industries are going to have a boom, and I think that will ripple through the economy. Repairing infrastructure will have a positive impact on our contracting risk. So from an economic standpoint, the federal government getting involved, the insurance companies paying their losses would be a positive for the economy and for employment, especially in those regions.” ( Sept. 15)
Richard Fearon, CFO, Eaton Corp., a power-management company: “Sales into construction markets in Florida, in Southern Texas have clearly been impacted. And so you’re going to lose some sales in the third quarter. It’s not a giant number, but it’s certainly in the millions of dollars, and you probably will get those lost sales back and more in the fourth quarter. And one other thing in the fourth quarter that we’re likely to see is we have a very large electrical service business where we go in and diagnose problems in given facilities, electrical infrastructure. Obviously, the hurricane and the flooding thereafter have caused lots of problems in lots of these buildings. So we should pick up a fair amount of business in the fourth quarter to go in and help solve those problems.” ( Sept. 14)
This article was provided by Bloomberg News.