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Sandy’s Impact on the Bottom Line

Matt Thalman
November 1, 2012

Now that the storm has passed and public officials are assessing the damage it caused, investors should start assessing the possible damage to their portfolios. In addition to the storm causing a number of deaths, property damage, and major power outages across the East Coast, the New York Stock Exchange was shut down for two days. Now that trading has resumed, let's take a look at three specific companies which either have been or will be affected by the storm, and determine what investors could expect Hurricane Sandy's impact to be on their earnings and share prices.

First, power companies such as Dominion Resources (NYSE: D  ) or Consolidated Edison (NYSE: ED  ) are likely to see some negative impact on earnings related to Sandy. But unlike during Hurricane Irene, when Dominion had more than 1 million customers without power, this storm has left the company slightly better off. Dominion estimates only 100,000 customers lost electricity during Sandy. But New Jersey-based Public Service Enterprise Group (NYSE: PEG  )  wasn't so lucky. New Jersey was directly in the center of Sandy's path and one of the hardest hit states; it reported that more than 2 million customers were without power. PEG is New Jersey's largest utility company; it  reported having 1.4 million customers without power.  

Using Dominion as a model, when Hurricane Irene hit in August of 2011, the company didn't really see a big effect on it's stock price during the days after the storm. But the company took a $121 million hit on earnings in that quarter which was directly related to the storm. PEG is actually trading higher today, but investors may not be pushing the stock higher if losses related to the storm put a hurting on earnings per share. 

While the electric utility companies can have profits hurt by storms and natural disasters, other utilities can benefit from these events. After a hurricane such as Sandy homes are left trashed. Think back to any of the number of images you have seen the past few days and try and picture what made them all look so terrible. It was all the debris lying on the roads or floating in the water. Trash still can be seen laying all over the landscape in many of the storm-affected states. This bodes well for the trash utility companies like Republic Services (NYSE: