Whether it was last year’s cold and wet spring or 2012’s warmer than usual winter, many companies have used the “blame the weather” explanation for poor quarterly earnings and sales. Last year, Lowe’s Companies, Inc. (NYSE:LOW)’s used this for first quarter numbers and in the winter, Kohl’s Corporation (NYSE:KSS) and The TJX Companies, Inc. (NYSE:TJX) were just some of the companies vocal about the effect of the unusually warm winter.
But now companies have a new finger to point their problems at: Europe’s economic problems.
With earnings season in full swing, numerous companies have posted disappointing results. While they have different reasons, many of them say figures were off because of Europe.
Let’s take a look at a some recent announcements.
On Wednesday, Dutch bank and insurer ING Groep N.V. (NYSE:ING) reported its first quarter earnings dropped 50 percent from numerous charges and provisions; core businesses were slightly weaker.
Net profit for the company, which has been called one of the world’s most “systemically important” financial companies by the G-20’s Financial Stability Board according to Bloomberg, was EUR 680 million ($882 million), a decline from EUR 1.38 billion a year ago.
What’s the cause for the decline? ING CEO Jan Hommen said in a statement, “The European sovereign debt crisis persisted, increasing volatility on financial markets. The impact of this environment was evident in our underlying results.”
Oh, it was due to Europe’s sovereign debt crisis. This was just one of many companies and earlier this week, Fossil, Inc. (NASDAQ:FOSL) reported its disappointing earnings report. The company “blamed its pessimistic outlook on its European business” according to our earlier story and it had a pretty gloomy story overall in the first quarter thanks to Europe.
This excuse had also been used at the end of the Fiscal Year 2011.
Other companies affected by the European debt problems and their earnings report include Exxon Mobil Corporation (NYSE:XOM). In April, Exxon Mobil announced $2 in earnings per share for the first quarter, coming in below analysts’ estimates of $2.11, while profits dropped from $10.7 billion in the first quarter last year as compared to this year’s $9.45 billion.
While the company said the bad numbers came from its disappointing upstream business, the Europe excuse made its way into the conversation and then some. In addition to Europe, Exxon Mobil said it was the global economy as a whole that affected the company. Management said, “Globally, growth slowed in the first quarter… The U.S. and Japanese economies are also expected to show declines from fourth-quarter levels.“
And just to add some more fuel to the fire, The Dow Chemical Company (NYSE:DOW) reported last month that its first quarter earnings dipped 34 percent. Why? Yes, there’s a pattern here: it was partially due to $357 million pre-tax charge from plant closures resulting from weak European business conditions.
By now, you see our point. Poor earnings and sales will be blamed on European economic problems. But at what point do we really begin to point fingers at ourselves? Of-course if the summer is cool we can always blame the weather again.