THE POST 200
Companies Assess Economy's Impact
Monday, May 12, 2008
The Federal Reserve has its beige book, a periodic report on the state of the economy based on interviews with business leaders across the country. We can call on The Post 200, our annual list of Greater Washington's largest companies and organizations. Many of the public companies on the list have offered their assessments of the economy in recent weeks.
What follows are excerpts from their remarks to analysts during conference calls on their financial results. Many painted a painful picture, even if individually they remained upbeat about their own ability to weather what may come. The exception was the big defense contractors, who remained bullish about their prospects.
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W. Edward Walter, president and chief executive at Host Hotels & Resorts, said short-term business and leisure travel appeared to be slowing.
We did experience a general weakness in business travel across many markets, as overall corporate bookings and special corporate bookings declined by roughly 5 percent. We also saw greater weakness on weekend nights as compared to weekdays, suggesting that domestic leisure business was soft. On the positive side, we see a general increase in international business in our gateway market, which is helping to offset some of the impact of the U.S. economic slowdown.
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John F. Remondi, above, chief financial officer for Sallie Mae, said the turmoil in the credit markets has taken its toll on the student loan business.
To say that the funding environment is difficult is a tremendous understatement. Market conditions have made the issuance of even government guarantee, student loan asset-backed securities a massive challenge.
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Gary L. Perlin, the chief financial officer for Capital One, said the credit card company is bracing for higher rates of delinquencies and bad debts.