Since mid-July 2014, the U.S. dollar has been on a tear. In that time, the Dollar Index has shot up over 17%.
If you had a European vacation planned for this spring, that’s great news. But the dollar’s charge hasn’t been quite as welcome for many U.S.-based multinational corporations.
Indeed, earnings season has been hard on a number of the market’s biggest companies. Here’s what you need to know going forward…
As the U.S. dollar strengthens, it puts a strain on domestic firms with significant overseas revenue. That’s because, when foreign currencies lose value relative to the dollar, profits translated back into dollars are diminished. Not surprisingly, this can lead to poor revenue comparables and even earnings misses.
And the pain isn’t confined to just one industry, either. Let’s take a look at a few of the areas feeling the headwinds from a strong U.S. dollar…
Area #1: Beverage Companies. Two titans of the beverage industry, PepsiCo (PEP) and Coca-Cola (KO), both admitted to feeling the negative effects of the currency exchange in their recent earnings transcripts.
Coca-Cola reported that fourth-quarter earnings per share (EPS) faced a 10% currency headwind, while it expects a 5% hit to net revenue and a 7% to 8% blow to profit before tax for full year 2015
Read more at Click here / www.trade4x.net
If you had a European vacation planned for this spring, that’s great news. But the dollar’s charge hasn’t been quite as welcome for many U.S.-based multinational corporations.
Indeed, earnings season has been hard on a number of the market’s biggest companies. Here’s what you need to know going forward…
As the U.S. dollar strengthens, it puts a strain on domestic firms with significant overseas revenue. That’s because, when foreign currencies lose value relative to the dollar, profits translated back into dollars are diminished. Not surprisingly, this can lead to poor revenue comparables and even earnings misses.
And the pain isn’t confined to just one industry, either. Let’s take a look at a few of the areas feeling the headwinds from a strong U.S. dollar…
Area #1: Beverage Companies. Two titans of the beverage industry, PepsiCo (PEP) and Coca-Cola (KO), both admitted to feeling the negative effects of the currency exchange in their recent earnings transcripts.
Coca-Cola reported that fourth-quarter earnings per share (EPS) faced a 10% currency headwind, while it expects a 5% hit to net revenue and a 7% to 8% blow to profit before tax for full year 2015
Read more at Click here / www.trade4x.net
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