Corporations just beginning to tally Sandy's costs
NEW YORK (AP) -- Corporate America is just starting to add up its losses from Superstorm Sandy, expected to be one of the most expensive storms in U.S. history.
Delta Air Lines and Verizon were two of the first major companies to formally indicate the obvious, saying Friday that they will lose money because of the storm.
Delta had to cancel thousands of flights, while Verizon had cell towers blown out of commission and its offices flooded by the storm that thrashed the mid-Atlantic and the Northeast.
The U.S. death toll has climbed past 90 in 10 states from the storm that ravaged coastal towns and left millions without electricity.
Transportation around New York City slowed to a crawl in the days before the storm hit. Airlines stopped using the region's airports, causing a chain-reaction of cancellations in other cities across the country. More than 20,000 flights were cancelled according to FlightStats.
Delta Air Lines Inc., which is based in Atlanta, was the first of the major airlines to try to gauge the cost. The company said Friday it lost $45 million in sales from canceling more than 3,500 flights in the final days of October.
Verizon Communications Inc. said Friday that it is still working to restore services for many of its customers. It warned that Sandy could put a "significant" hit on its results. The New York-based company, however, cautioned that it's not yet possible to put a specific dollar figure on the costs.
The corporate bill is sure to swell in the coming weeks as casinos, insurance companies and retailers tally the damage.
On the flip side, companies such as Lowe's Cos. and Home Depot Inc. could benefit as people load up on generators and other supplies needed for the rebuilding effort. And there are signs that some stricken businesses are coming back to life. Atlantic City's 12 casinos, closed in advance of the storm, start reopening Friday after Gov. Chris Christie gave them the OK.
Retail stores, excluding restaurants, stood to lose at least $25 billion in sales during the week of the superstorm, according to Burt Flickinger III of the retail consultancy Strategic Resource Group. Because of the storm, he cut his forecast for holiday sales to a 2.1 percent increase over last year from the 3.2 percent increase he had predicted earlier.
Major retailers began reopening stores Friday at the outset of the critical holiday shopping period. Sears Holdings Corp., which operates Kmart and Sears, said 29 of its stores in the affected region remained closed on Friday, down from 187 Monday.
Some Sears stores had generators running in order to open before electricity was restored to the surrounding area, said Chris Braithwaite, a spokesman for Sears, which is based in Hoffman Estates, Ill.
Orlando, Fla.-based Darden Restaurants Inc., parent of Olive Garden and Red Lobster, by Friday had reopened all but 21 of the 260 restaurants it had closed Monday. Flooding kept two restaurants closed, while the rest had no power. Of the 21 still shuttered, 20 are in New York and New Jersey, and one is in Connecticut.
During their monthly sales reports on Thursday, Costco Wholesale Corp., Nordstrom, and Rite Aid all said they expected their November sales would suffer.