CURRENCY IMPACT REPORT

Quarterly Research on the Impacts of Currency on Corporate Earnings

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.

A total of 296 companies— 245 in North America and 51 in Europe— reported negative currency impacts in Q4 2016. Quantified negative impacts remained 4 times greater than the Industry Standard MBO of less than $0.01 EPS impact.