Several U.S. companies have issued earnings warnings after the attacks on the World Trade Center and Pentagon, the first signs of the wider economic toll of the disaster.

Although the warnings were a trickle on Wednesday, investors said they expected it to become a flood.

Insurers were among the first to report profits will be hit after two hijacked commercial airliners destroyed the twin towers of the World Trade Center, striking at the heart of New York's financial center.

Airlines and hotel companies were among others that would be affected, as the government steps up security and people cut back on travel.

``I think it will get worse,'' said Howard Kornblue, a money manager with ING Pilgrim Inc., which oversees $20 billion from Scottsdale, Arizona.

``We have not seen enough quantitative information but what we will see will be astounding as the numbers for business damage, employees killed, dollars lost, start to be put together.'' he said. ``It will be shocking.''

Corporate profits for Standard & Poor's 500 index companies, which were already being squeezed by a slowing economy, are expected to drop by 14.8 percent in the third quarter, research firm Thomson Financial/First Call said. That was down from the 14.7 percent decline in year-over-year profits expected on Tuesday, before analysts began reacting to the attacks.

Profits for S&P 500 companies are expected to drop by 2.9 percent in the fourth quarter, down from 2.6 percent on Tuesday.

Bermuda-based insurance group ACE Ltd. said on Wednesday that claims would cut third-quarter earnings by about $400 million, or about $1.55 per share. Before Tuesday's attack, Wall Street analysts had expected the firm to report third-quarter earnings of 70 cents per share, according to analysts polled by research firm Thomson Financial/First Call.

Chubb Corp., which sells corporate property and accident insurance, also said on Wednesday it expects to pay $100 million to $200 million on property claims alone, but did not say when that might affect earnings.

Chubb said it would also face claims for business interruption, accident and workers compensation policies, but did not quantify those. Before the disaster, analysts on average had expected Chubb to earn $1.05 per share in the September quarter, according to Thomson Financial/First Call.

American International Group Inc. and Berkshire Hathaway Inc. also said they will have claims, but did not make any estimate of losses.


The first warning from a lodging- and tourism-related company came from Toronto-based Fairmont Hotels & Resorts Inc., which said on Thursday it expects to lower its earnings guidance, but it said it was still unsure how the attacks would hurt the travel and hotel industry.

``FHR anticipates reduced travel that will impact the earnings performance of the industry as a whole. FHR does not expect to be affected more severely than the industry,'' the Toronto-based group said in a statement.

The company, which operates luxury and resort hotels in Canada, the United States, Mexico and Barbados, said it will provide revised estimates as soon as possible.

Midway Airlines said on Wednesday it had suspended all flight operations immediately, as a result of the attacks.

The airline said it recognized ``demand for air transportation is expected to decline sharply,'' in a statement.

Ticketholders would be given refunds and 1,700 employees would lose their jobs. Midway also said it would return leased aircraft and solicit bids for its remaining assets.

Other airlines announced they were resuming flights on Thursday, two days after the attack grounded all flights, but they did not say how their earnings would be affected.

The International Air Transport Association (IATA), a global airlines body, said immediate revenue losses and extra costs for the industry would be $10 billion.

Canadian travel operator Transat A.T, Inc. said on Thursday it expected the attack to have a ``significant impact'' on its fourth quarter results, but did not quantify the effect. Shares of the owner of Canada's largest charter airline, Air Transat, fell 30 percent to C$5.25 on the Toronto Stock Exchange.