Archive for July, 2016

Zurich Insurance, Astral Foods, FirstGroup, and Bossini blame profit warnings on the weather

As shares plummet, how much longer will investors accept the finger pointing?

NYSE

Blaming the weather appears to be a long and noble tradition, supported by leaders in every industry, across the globe. Take 2016, for instance; this year, the weather has already been cited by an incredible array of business leaders for a range of spectacular losses.

Sports Direct, the United Kingdom’s largest sporting retailer, operating roughly 670 stores worldwide, was the first out of the gates. It issued a profit warning on January 8 announcing that it expected to miss its target for underlying profits due to unexpectedly warm weather over the Christmas period. That warning sent shares falling 14%. It was a real surprise after the company had just one month earlier confirmed it would hit its targets for this financial year during the reporting of its half-term results.

FirstGroup, the leading transport operator in the UK and North America, quickly followed suit, issuing its own profit warning that the floods that hit Britain over the winter had resulted in revenues falling by 9.5 percent in the third quarter and that operating profits for the year would be “slightly lowered”. Similarly, Zurich Insurance released a profit warning of an estimated 100 million further quarter business operating loss for its general insurance business as a result of the high number of claims following the British floods. Shares plummeted 9% following the release.

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Canadian farmers pushed to the limit by this summer’s heat and drought

corn

It’s a hot, dry summer for most of Canada, which is great for trips to the cottage and dog days by the beach. After two years of unusually cool, wet summers, it seems like a welcome change. But hot, dry weather is for farmers just another iteration of abnormal weather conditions. Farmers rely on normal weather, and it’s nowhere to be found in Canada again this year.

Droughts have been declared in coastal British Columbia and conservation authorities in regions of southern Ontario and Quebec have issued water advisories. Agricultural land in New Brunswick and Nova Scotia is parched, just as in the interior of British Columbia. In Toronto, Ontario there have been more than a dozen days of temperatures exceeding 30 degrees Celsius, where the average is four such days. Where 71.5 mm of rain is expected there, they have received 26.4. Canadians say they are suffering from “weather whiplash”, seeing opposite scenarios of unseasonal and unexpected weather back-to-back each year.

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