CURRENCY IMPACT REPORT

Quarterly Research on the Impacts of Currency on Corporate Earnings

European companies continue to see large negative currency impacts after a spike in reported losses due to FX in the previous quarter. Collectively, North American and European companies quantified $15.44 billion in negative currency impacts, with North American companies accounting for 6.6 percent of the impacts.

European companies report negative currency impacts three times higher than that of the previous quarter. Collectively, North American and European companies quantified $22.93 billion in negative currency impacts, with North American companies accounting for only 1.6% of the impacts.

European companies continue to see an increase in quantified negative currency impacts, reporting an increase in impacts of $2.5 billion over the previous quarter. As impacts in Europe rise, North American corporations have experienced another quarter with negative impacts below $1.5 billion.

European multinationals reported the largest currency impact since Q2 2015, with 26 companies disclosing a collective $4.27 billion in impacts.

In an up-tick from the trend of decreasing volatility and negative FX impacts over the previous five quarters, Q2 2017 has shown an increase in negative impact by $740 million, with North American and European corporates quantifying a total negative impact of $7.44 billion.

The continuation of low negative revenue impacts does not signify an end to currency volatility – just the progression of a pattern of low volatility that leaves unsuspecting corporates susceptible to risk when the next spike in volatility occurs.