Shares of food companies such as Kraft Foods Inc and General Mills Inc may rise when US stock markets reopen next week, as investors look for companies that have steady earnings growth, analysts said.
Sales at companies that make packaged foods such as cereal and hot dogs would hold up even if the US economy sunk into a recession because consumers need to eat, investors said. Analysts and investors are concerned that consumer confidence may erode following Tuesday's attacks on the World Trade Center and the Pentagon. Confidence this month had hit an 8 1/2 year low before the tragedy.
"We're going to need this area," said Allen Ashcroft, a portfolio manager for Allied Investment Advisors, whose holdings include Kraft, Campbell Soup Co and PepsiCo Inc.
Most grocery stores in Manhattan remained open throughout the week, some using supplies from nearby distribution centers, as consumers stocked up on essentials such as bread and water. Now that the majority of roads and bridges to the area have been reopened, food shipments may increase as grocers and wholesalers restock their shelves. More consumers may eat at home to keep up with the aftermath of Tuesday's events on television, investors said.
Annual profits for food companies in the Dow Jones Food Group have risen, on average, every year since at least 1994, said Chuck Hill, research director Thomson Financial/First Call.
To be sure, earnings last year rose just an average 2 percent, crimped by foreign-currency declines, acquisition-related costs and pressure to keep prices low -- factors that will result in profit declines this year, Hill said. Still, analysts expect earnings to rebound next year, with an average 14 percent gain, according to First Call.
The New York, NASDAQ and American stock exchanges are expected to open Monday. They closed after hijacked planes crashed into the World Trade Center's twin towers and the Pentagon, possibly killing thousands of people.
New York City reopened some of the bridges and tunnels linking Manhattan to New Jersey and the outer boroughs Wednesday, allowing food trucks and other automobiles to travel north of 14th street in Manhattan. Traffic will be allowed north of Canal Street today. This will help replenish store shelves.
Companies say they haven't experienced any disruption in delivery systems since Tuesday and that it's too early to tell what outcome the events will have on sales.
"Even if there is disruptions, it's going to be short-term in nature," said Chris Delpi, an analyst at Glenmede Trust, which holds shares in Campbell Soup and General Mills.
Market and government officials are trying to find a way to reopen the stock markets without interfering with rescue efforts.
The city will open a "corridor" to the Wall Street area in preparation for the opening of the stock exchange, Mayor Rudolph Giuliani said last night.
US stock markets couldn't open today because of concerns that telecom-munications systems wouldn't be ready, New York Stock Exchange Chairman Richard Grasso said yesterday. US bond trading began yesterday after a two-day halt.
Food companies are trying to assist in recovery efforts even as their employees focus on finding colleagues and loved ones.
The companies have been donating truckloads of food to the American Red Cross, the Salvation Army and other relief workers.
Kraft sent six truckloads of CapriSun, Handi-Snacks Cheese and Crackers, Oreo cookies and other products to New York and Washington and another truck to the Chicago airports to feed stranded passengers.
"I just wanted to be home with my family and that's where I am now," said Anthony Gambacorta, chief investment officer of Preswick Capital Management LLC. "What's really happening now [with the companies] is there's this massive rescue effort and they're channeling food."
Gambacorta said most food companies will need to look at ways to improve security because they sell products around the world.
General Mills and the others have assured customers that product delivery won't be halted by the attacks even if they use systems that deliver items directly to store warehouses rather than to a wholesaler. This system, called direct store delivery, is used by Kraft's Nabisco unit and Kellogg's Keebler and generally is thought to be more efficient.
Ultimately, it's too early to tell what economic impact the attack will have, companies said. Christine Ervin, a Kellogg spokeswoman, said finances have really only been part of the concern the past few days.
"We're really focusing on the human tragedy," she said.
DEFENDING DEMOCRACY: Taiwan shares the same values as those that fought in WWII, and nations must unite to halt the expansion of a new authoritarian bloc, Lai said The government yesterday held a commemoration ceremony for Victory in Europe (V-E) Day, joining the rest of the world for the first time to mark the anniversary of the end of World War II in Europe. Taiwan honoring V-E Day signifies “our growing connections with the international community,” President William Lai (賴清德) said at a reception in Taipei on the 80th anniversary of V-E Day. One of the major lessons of World War II is that “authoritarianism and aggression lead only to slaughter, tragedy and greater inequality,” Lai said. Even more importantly, the war also taught people that “those who cherish peace cannot
STEADFAST FRIEND: The bills encourage increased Taiwan-US engagement and address China’s distortion of UN Resolution 2758 to isolate Taiwan internationally The Presidential Office yesterday thanked the US House of Representatives for unanimously passing two Taiwan-related bills highlighting its solid support for Taiwan’s democracy and global participation, and for deepening bilateral relations. One of the bills, the Taiwan Assurance Implementation Act, requires the US Department of State to periodically review its guidelines for engagement with Taiwan, and report to the US Congress on the guidelines and plans to lift self-imposed limitations on US-Taiwan engagement. The other bill is the Taiwan International Solidarity Act, which clarifies that UN Resolution 2758 does not address the issue of the representation of Taiwan or its people in
The Philippines yesterday criticized a “high-risk” maneuver by a Chinese vessel near the disputed Scarborough Shoal (Huangyan Island, 黃岩島) in a rare incident involving warships from the two navies. The Scarborough Shoal — a triangular chain of reefs and rocks in the contested South China Sea — has been a flash point between the countries since China seized it from the Philippines in 2012. Taiwan also claims the shoal. Monday’s encounter took place approximately 11.8 nautical miles (22km) southeast” of the Scarborough Shoal, the Philippine military said, during ongoing US-Philippine military exercises that Beijing has criticized as destabilizing. “The Chinese frigate BN 554 was
The number of births in Taiwan fell to an all-time monthly low last month, while the population declined for the 16th consecutive month, Ministry of the Interior data released on Friday showed. The number of newborns totaled 8,684, which is 704 births fewer than in March and the lowest monthly figure on record, the ministry said. That is equivalent to roughly one baby born every five minutes and an annual crude birthrate of 4.52 per 1,000 people, the ministry added. Meanwhile, 17,205 deaths were recorded, resulting in a natural population decrease of 8,521, the data showed. More people are also leaving Taiwan, with net
RSS