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Currency impact on N.American companies' Q1 results lowest since 2014 -report

Published 2017-06-28, 05:10 p/m
© Reuters.  Currency impact on N.American companies' Q1 results lowest since 2014 -report
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NEW YORK, June 28 (Reuters) - Currency market fluctuations in the first quarter of 2017 had the smallest negative impact on North American companies' financial results since 2014, FIREapps said in a report on Wednesday.

For the first quarter of this year, the negative impact of currency fluctuations on North American companies - including the United States, Canada and Mexico - was $6.47 billion. That was the smallest for any quarter since the third quarter of 2014, when the effect was $4.00 billion, according to FIREapps, a currency risk consulting firm.

The data also showed fewer companies overall reporting the currency impact in the first quarter of 2017 compared with the year-ago quarter and the fourth quarter of 2016.

FIREapps said that of the 850 North American-based multinational companies it analyzed in the first quarter, 213 reported negative currency impacts, 13.1 percent lower than the number of companies in fourth quarter.

"This is the third quarter in a row where less than 30 percent of the North American corporates surveyed reported a currency headwind (negative impact to earnings)," FIREapps said in a note.

The foreign currency earnings of U.S. multinational companies are worth less in dollars when the dollar is stronger. Conversely, the robust U.S. currency also makes American-made goods and services more expensive overseas.

The U.S. dollar index .DXY , which measures the greenback against six major currencies, declined 1.8 percent in the first quarter and is down 4.3 percent so far in the current quarter.

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