Quarterly Profit May Fall as Much as 15%

U.S. companies’ fourth-quarter profit may decline as much as 15% from a year earlier because of fallout from the terrorist attacks, said Chuck Hill, research director at earnings-tracker Thomson Financial/First Call in Boston.

“In this environment, where we’re hanging by a thread with consumer spending keeping us going . . . this might be enough to push us over the edge” into a recession, Hill said.

Analysts had forecast a 2.7% decline for the fourth quarter before the attacks, he said, and First Call had expected a decline of at least 5%. The odds now are that the decline will be 10% to 15%, Hill said.

Airlines, hotels and retailers may be among the hardest hit, analysts said.

The attacks came “at the worst possible time for the economy,” Hill said, adding that the chances have diminished for a recovery as early as the first quarter.

Analysts had forecast a profit increase of 8.1% for the first quarter of 2002. Hill also said that figure is in doubt now. He said it’s too early to give any estimate.