Q3 Earnings Releases Showcase Which Companies Have and Have Not Been Able to Protect their Earnings and EPS from European Debt Crisis-Spawned Currency Volatility
Over the last several months news outlets and politicians have obsessed on the risk created by the EURO crisis, yet many corporates were unprepared for the range and breadth of the resulting foreign exchange volatility impacts. Q3 results clearly show that FX risk management strategies focused primarily on EUR/USD are insufficient to deal with the broad-based volatility in currencies including AUD, BRL, GBP, CAD, YEN, CHF, and WON.
How have some companies limited their FX Gains and Losses to +/- $1M on $10B revenues this quarter while others have lost as much as 1/3 of their EPS to currency fluctuations?
The key to success in this new world of volatility is to become currency agnostic. By having a comprehensive, holistic understanding of your exposures you can make cost effective exposure and risk management decisions. In a recent interview on Bloomberg TV, FiREapps CEO, Wolfgang Koester provides his insights on companies that have been highly effective in their risk management strategies and how that directly contributed to earnings predictability and shareholder value.
Come see Wolfgang and discuss with your peers how the FX game has changed and how you can be a catalyst for success in your organization. Join us at the AFP show in Boston on Monday, November 7, 2011 in booth 2012.
Expect the unexpected as the EURO crisis continues to unfold. Get smart with FX exposure analytics and get rid of unwanted earnings and EPS surprises for good.