Homestore.com Has a Deep Hole to Claw Out Of

These are extraordinary times, to put it euphemistically, so it's understandable that some companies would fall short of their goals in an extraordinary way.

Look at Homestore.com(HOMS Quote), the operator of the nation's biggest real estate Web site. In early September, about a week before terrorist attacks hit the U.S., the company reiterated guidance for the quarter ending Sept. 30, then more than two-thirds complete. Last week, the company said revenue would be down 14% for the quarter. Per-share earnings, excluding certain items, would evaporate from the expected 16 cents to a loss ranging from 1 cent to 6 cents, Homestore said.

The problem isn't that Homestore.com suffered a setback, like so many other businesses; rather, it's the magnitude of the setback and the time it will take the company to recover. ...