The economic impact of Hurricane Katrina (search), which has left businesses in its path at a standstill and driven oil prices to record highs, will take a big bite out of corporate profits for the rest of the year.

"Oil prices are going nowhere but up and so we believe that earnings are going to go south," Howard Silverblatt, Standard & Poor's (search) strategist, said Wednesday. "It does cast a doubt over whether earnings growth for the rest of the year will be at double-digit levels."

Damage from Katrina has choked off oil and gasoline production on the Gulf Coast (search), prompting a spike in crude oil and gasoline prices.

Apart from the storm's massive disruption to business activity in the region, analysts fret about the impact of higher energy costs on consumers and corporations.

"Look for it in the earnings of discount retailers, restaurants and travel sectors," said Hans Olsen, chief investment officer at Bingham Legg Advisers in Boston. "Start to look for GDP to be impacted, earnings in the third and fourth quarters, especially now because we're starting to approach the home heating season. This is not good. We haven't seen anything like this in the better part of 25 years, where you start to have people thinking about gas lines."

Still, sectors such as energy and construction are expected to post gains.

UBS strategist Thomas Doerflinger sees soaring oil prices boosting energy earnings, which will offset the drop in profits in other sectors, keeping overall S&P profit growth over 10 percent.

"Earnings will continue to be strong. But remember, a major driver will continue to be high prices, with energy estimates continuing to increase," Doerflinger said.

After better-than-expected, double-digit earnings growth for 13 quarters in a row, third-quarter earnings are seen rising 12.9 percent and fourth-quarter profit growth is forecast at 10.8 percent, according to Reuters Estimates.

Silverblatt expects earnings in the energy sector to be up but sees consumer spending slipping sharply on higher energy prices.

Oil continued to hover around $70 a barrel even after the Bush administration said it would tap the Strategic Petroleum Reserve (search) to offset output lost when Katrina ripped through the Gulf of Mexico.

And energy experts, warning of a supply shock on the scale of the 1970s, said a two-year bull run that took oil to $70.85 a barrel on Tuesday may not have run its course.

"We have already started to see some consumer resistance on high oil prices and this is obviously going to increase, and it will hurt consumer spending," Silverblatt said, referring to retail heavyweight Wal-Mart Stores Inc.'s (WMT) warning in August of a weak third quarter as steep oil prices hurt consumer spending.

"We cannot tell how long it is going to take to figure out the damage caused by Katrina, but the longer it takes to determine, the worse the scenario is for earnings," he said.