Government Shutdown Has Lasting Effects on U.S. Companies

(MoneyWatch) The government shutdown may be over, but many American companies report they are still feeling the pain.

(MoneyWatch) The government shutdown may be over, but many American companies report they are still feeling the pain.

Despite the buoyant stock market and steady rise in corporate profits, a number of companies cite the shutdown as a factor in their earnings reports, or note the shutdown's lasting effects in making projections for the rest of 2013.

EBay (EBAY)

The online auction company's fourth quarter outlook was lower than what many analysts had projected. EBay's CEO said "uncertainty in the government" was partly to blame for what they expect will be a tepid holiday shopping season for e-commerce sites.

Southwest Airlines (LUV)

In a conference call with reporters on the airline's third quarter earnings, CFO Tammy Romo said that while they had a strong quarter, the government shutdown probably cost the company about $20 million in revenue.

Wal-Mart (WMT)

The head of Wal-Mart's U.S. operations told CNBC this week that sales lagged during the shutdown in areas with high concentrations of federal employees. The retail giant expects its net sales for the full year to grow between two and three percent, but that's down from previous estimates of five to six percent. In comments made in an investors meeting during the shutdown, Wal-Mart president and CEO Mike Duke said "it should come as no surprise that the government shutdown is on the minds of our U.S. customers."

Stanley Black and Decker (SWK)

The power tool maker cuts its 2013 profit forecast due in part to the shutdown. "We really believe the US government sequestration and shutdown has had a modest impact in Q3 on us and will have a slightly more significant impact on us in Q4," said CFO Donald Allan in a conference call.

FLIR Systems (FLIR)

The company that makes thermal imaging products, infrared cameras and other surveillance equipment for border patrol and other agencies saw profits fall in September, as federal agencies trimmed spending. In a statement the company's chief executive said, "Ongoing uncertainty in the U.S. government is likely to continue to affect our performance in the fourth quarter." FLIR cut its revenue forecast for the year downward by some $100 million.

US Airways (LCC)

With Reagan National Airport serving as one of its hubs, the airline felt the squeeze from the government shutdown more than most of its competitors. US Airways reported that overall bookings in late September and early October fell about eight percent as business travel for government employees ground to a halt.

While these large companies felt the pinch, most will quickly bounce back. Meanwhile, many small businesses were also affected, some dramatically -- especially near tourist attractions that closed during the budget crisis. In some cases they don't have the resources to weather the blows the way the larger businesses did.
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