First it was the weather's fault when housing numbers cratered in late 2013 and early 2014. Then, when the cratering continued even after the snow had melted, first the NAR, and then economists, had to admit that it was more than merely the weather to blame for the end of the 4th consecutive dead cat bounce in US housing now that the latest and greatest boost to housing courtesy of the Fed, is finally fading. Soon after economists realized, two months after the infamous polar vortex, they will have to also trample Q1 GDP forecasts, and one after another, sellside firms cut Q1 GDP from over 3% to just above, if not under 1%.
Still, all of them without exception are hoping that the economy will rebound, because - you guessed it - it was nothing more than a few snowstorms that forced the world's largest economy to grind to a halt for three months.
And since stupidity rapidly goes mainstream, the same excuse used to "explain" away housing and economic deterioration was instantly (ab)used by a barrage of public company CEOs, whose earnings results were disappointing for only one reason (in their minds) - the weather. Because one always needs a narrative - any narrative - to explain away stories such as this: "Q1 Earnings Season Summary: More Than Half Have Missed Revenues"...
Yes, really: overnight even Goldman released, with a straight face, a report titled: "Revenue surprises are weak, in large part due to weather." Oh ok, we almost thought that companies which account for trillions in global sales In places like Asia, Europe, Africa and Australia), including areas that did not suffer the Polar Vortex such as the US northeast, would have a higher hurdle than "the weather" - apparently we were wrong. Just how wrong we were, we learn by listening to the following CEOs come out, one after another, explaining that it's not the global consumer who is tapped out, but it's the... snow in the winter.
In terms of top-line growth in other parts of our business, we’re broadly on track except for K-C Professional in North America. There we got off to a slow start in the year, there are some impacts from the severe weather that we had in the U.S. in January and February and conditions in that business have improved more recently and we’re expecting better performance as we roll forward into the year.
…I think that the weather and the knock-on impacts of the weather, the logistics impacts and stuff like that, were not anticipated to be as bad as they were… But again, looking at March exit rates, they were very strong, very solid, and that gives us high confidence for not only just Q2 but the rest of the year.
American Express (AXP)
Additionally, volume growth rates appeared to be influenced in part by the severe winter weather. I would add that while we are always cautious about drawing conclusion from intra-period trends, we were encouraged to see that U.S. billings growth increased over the second half of the quarter as the weather improved.
Stryker Corporation (SYK)
While we benefited from one extra selling day in the quarter, this was offset by the negative impact from the unusually severe weather which resulted in a high number of cancelled surgeries. As these surgeries are being rescheduled over the course of the year, we do not anticipate any discernible impact on our full-year growth rates. Illinois Tool Works (ITW)
Weather had a fairly limited impact on our North American revenues, although sequentially we did see a slightly stronger March and April’s off to a decent start.
Robert Half Intl (RHI)
From a cyclical perspective – so, first of all, as we look through the quarter, January and February were clearly revenue weather impacted. We would estimate that the weather reduced our growth rates on the temp side by about 1%. We then look at March. March was a very solid quarter. As we talked about, those growth rates accelerated very nicely into the first two weeks of April.
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And on, and on, one after another. It would be tragic if it weren't so funny.