US athletic and sporting goods company, Russell Corporation, has announced that it expects its diluted earnings per share for the third quarter of 2005 and full year to be below the company's previously issued guidance. These projections do not include the direct negative impact of approximately $0.16 to $0.20 per share from Hurricane Katrina for fiscal 2005.

The company stated that the announcement was the result of the combined effect of ongoing operational issues, the impact of Hurricane Katrina, and the delay of the full implementation of CAFTA. Despite the passage of the CAFTA legislation, it is currently required that duties continue to be paid resulting in additional unanticipated costs in the current quarter. It is anticipated that the legislation will be implemented by January 2006.

Although the company did not suffer major direct losses to production facilities or distribution operations from Hurricane Katrina, Gulfport, Mississippi, was Russell's primary port of entry for finished goods and for shipment of fabric and cut parts for products assembled in owned or contracted operations in Central America, the Caribbean and the Yucatan peninsula of Mexico. With more than 70% of Russell's internal production utilising that facility, more than 40 containers of product were lost or damaged in the storm.