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Expect to hear a lot companies saying, “We missed earnings. Don’t blame. It's all Katrina’s fault.”

Some analysts say companies can be too eager to blame their poor performances on exogenous shocks, such as wars and the weather, in hopes that investors will overlook other problems they are confronting.

But as long as these companies provide assurance that the slide will be only short term, some analysts say investors could give a "free pass" to a number of companies that blame Katrina for various earnings shortfalls. The trick in the weeks ahead will be divining those companies with businesses that truly are being hurt by the damage to the New Orleans region, and those companies only somewhat affected but dealing with troubles in their operations elsewhere.

Some unusual suspects like Cendant, Knight Ridder, Tyson Foods and Books-A-Million have already blamed Katrina for their troubles.

Posted by edelfenbein at September 15, 2005 4:19 PM