Some Firms to Get Windfall From Quake
The devastating earthquake that struck Tuesday in San Francisco is providing multimillion-dollar business opportunities for scores of companies, including construction firms, companies that preserve computer data and those that supply temporary office space.
Only hours after the quake, for example, at least five San Francisco insurance and financial institutions paid as much as $25,000 each to Sungard Data Systems Inc., a Wayne, Pa.-based company that provides “disaster recovery” services for businesses that depend on computers.
The five companies sent back-up data tapes by plane to Sungard’s Philadelphia’s office to preserve valuable computer programs designed to operate automated teller machines and other critical operations, said Susan Hetzel, Sungard’s marketing manager.
The potential market for such services in the wake of Tuesday’s earthquake is difficult to pin down because many experts are reluctant to discuss the profits that could flow from repairing and preventing further damage from the earthquake.
“We are not profiteers,” said Hetzel. “Most of our clients contracted with us long before this earthquake. It’s just that we are in the sort of business where it helps to be prepared. Companies can go under in 48 hours if they are not ready for events like this.”
What’s more, some companies that expected huge demand for their products or services complained that overburdened phone lines on Tuesday kept sales calls from getting through.
“We’ve gotten some calls but we were expecting a lot more,” said Scott Alexander, an assistant branch manager for San Lorenzo-based McGrath Rentcorp, which had $35 million in sales last year from leasing and selling modular offices.
Alexander said the structures--which rent for $150 to $9,000 a month--are usually used by school systems and building contractors. But he said he expects that Bay Area companies in heavily damaged buildings may move part of their operations into modular office space until the damage could be assessed and repaired.
Experts say the damage is sure to approach the $4 billion in insurance policy claims caused by another recent disaster a month ago--Hurricane Hugo. Companies involved in the first step of the rebuilding process immediately went into action.
“We volunteered five of our structural engineers to assess the damage,” said Deborah Land, a spokeswoman for Fluor Corp. in Irvine. “They were dispatched this morning (Wednesday) on military aircraft.”
Once the engineers complete their analysis, “the demand is likely to be substantial for heavy construction work,” predicts Jess Hawley, a spokesman for Boise, Ida.-based Morrison Knudsen, which has a 400-person office in San Francisco and has done construction work on the Bay Area Rapid Transit system.
Indeed, stocks of building materials producers advanced in trading on the nation’s stock exchanges Wednesday.
INVESTING IN REBUILDING Even as the rubble of the Marina district of San Francisco was smoldering, above, investors saw opportunities to take part in what will be a monumental rebuilding effort. Companies involved in building products, insurance, and computer recovery saw strong gains in their stock price.
INSURANCE STOCKS
Group/ Wed. Companies close change GeneralRE Corp. $86.50 +$2.75 Marsh& McLennan 75.875 +3.125 Alexander& Alexander 32.00 +2.00 CIGNA 62.50 +0.875
BUILDING MATERIALS
Group/ Wed. Companies close change Georgia Pacific $58.00 +$1.25 Louisiana Pacific 40.75 +1.00 Willamette Industries 51.75 +1.50 CalMat Co. 28.75 +1.75 Lone Star Industries 29.25 +1.75 Lafarge Corp. 19.50 +1.00
HEAVY CONSTRUCTION
Group/ Wed. Companies close change Fluor $33.375 +$0.75 Morrison Knudsen 44.125 +2.25 Foster Wheeler 18.25 +0.375 Ameron Inc. 39.75 +2.375 Kasler 9.875 +2.125
COMPUTER ‘DISASTER RECOVERY’ SERVICES
Group/ Wed. Companies close change Comdisco Inc. $29.75 $+0.25 SunGard Data Systems 21.25 +1.75
