Wednesday, April 16, 2008

Weak Dollar is often-overlooked key to earnings

Foreign exchange is often-overlooked key to earnings -analyst - MarketWatch: "SAN FRANCISCO (MarketWatch) -- Investors who ignore the potential impact of foreign exchange markets on earnings do so at their peril, as a spate of recent results show, a currencies analyst said Wednesday.
'There is one consideration that rarely pops into the mind of the American investor but can mean the difference between a good quarter and a bad one -- the impact of currency fluctuations on a company's bottom line,' wrote Kathy Lien, chief strategist at Forex Capital Markets....

The weaker dollar increases the value of overseas earnings when repatriated into domestic currency, so it can lift the profits of companies with overseas exposure.

Chipmaking giant Intel Corp. (INTC: Intel Corporation News, chart, profile, more)
(INTC 22.19, +1.28, +6.1%) issued an upbeat forecast Tuesday during its first-quarter earnings report.
"Intel's CEO said this morning that they are not hurt by the U.S. slowdown because 75% of their sales are outside of the U.S.. Once again foreign demand is boosting growth," said Lien. "

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