(U-WIRE) WACO, Texas ? Businesses nationwide are using the Sept. 11 attacks as an excuse for lower-than-expected earnings in the third quarter. Shame on them.
Third-quarter earnings reports began coming out this week, and companies that produce everything from newspapers to tissue paper are blaming the attacks on our nation for their poor showings.
Kimberly-Clark Corp., the Dallas-based manufacturer of tissue paper and toilet paper, released its third-quarter earnings Monday. The company’s preliminary calculations indicate sales for the quarter would be $3.7 billion. This figure is up $200 million from the same quarter last year, but is below Wall Street expectations.
The company blames the figure on reduced demand for its products at hotels and office buildings following the Sept. 11 attacks. The report also indicated that lower sales in its Mexico operation contributed to the figure.
In a statement, Chairman and Chief Executive Wayne Sanders said earnings were on track until the attacks on New York City and Washington, D.C., according to Reuters news service. Of course, the earnings report is not a day-to-day account, so that fact cannot be verified. But even if he is correct, and sales dropped off significantly enough after the attacks to bring earnings below expectations, to blame an economic failure on these terrorist attacks is wrong.
The attacks on the World Trade Center, a worldwide symbol for capitalism, were clearly intended to cripple the nation’s economy, send investors cowering in corners with their money and weaken the power of the nation’s large corporations.
Investors suffer from mob mentality. A few words from Alan Greenspan’s mouth can send waves of change through the New York Stock Exchange. So, certainly a literal attack on the country’s financial center, which forced the closure of the nation’s markets for nearly a week, would be expected to hit the stock market, as it did.
But, the Dow Jones Industrial Average and NASDAQ had begun to level off, and people were beginning to return their money to the stocks and bonds they so trusted before the attacks. Then come the third-quarter earnings reports and the companies’ analyses of their own numbers.
“They hurt us,” the companies are whining to investors and analysts about the terrorist attackers.
Sure, they hurt us all in different ways. But the nation is not helping itself by attributing all its troubles to the terrorist attacks. It is only validating for the Al-Qaeda network that it accomplished its goal.
In claiming the most readily available scapegoat, these companies are trying to tell investors that, even though profits already were falling before the attacks ? indeed the economy was faltering before Sept. 11 ? things would have turned around if not for the terrorist attacks.
The New York Times Co., which publishes the New York Times and Boston Globe among other newspapers and owns other media properties nationwide, has blamed a 27 percent drop in profits on a decline in advertising revenues in the wake of the Sept. 11 attacks.
At the same time that advertising revenues were dropping, the New York Times sold about 130,000 more papers daily as a result of the public’s thirst for information on the attacks.
Knight-Ridder Inc., which publishes The Fort Worth Star-Telegram as well as The Miami Herald and numerous other papers, has similarly attributed third-quarter losses to terrorism.
The concept of huge international stories hurting media outlets is foreign to me.
Newspaper publishers live for these moments, in which all their journalistic talents are brought to bear in bringing the story to the public. But they are falling to the temptation to blame their economic troubles on the big story.
Companies need to realize they have a choice. They can give the terrorists what they want ? validation that their terror has swept through every sector of this nation’s economy and conscience.
Conversely, companies can tell the terrorists that despite their best efforts, the country’s economy is stronger than any terrorism, and that America’s citizens and corporate leaders are in control of their own destinies.
