28 Apr 2015
US corporate earnings season insight; so good so far - BBH
FXStreet (Guatemala) - Analysts at Brown Brothers Harriman noted that the US corporate earnings season is almost half over.
Key Quotes:
"Fears that the US S&P 500 would report the first decline in income since 2009 have eased. "
"One of the key reasons is that operating margins appear to have improved more than anticipated. Many had seemed to exaggerate the impact of the dollar's appreciation. It is true that many corporations have cited the dollar's rise as a factor dampening the value of their foreign sales. However, many analysts have confused this with a comprehensive evaluation."
"As we have argued, the US does not have an export-oriented model like Germany or China."
"...The US companies have pursued a direct investment strategy of build and selling abroad. Analysts appear to have under appreciated the savings achieved by affiliates of US companies that manufacturer outside the US, but sell their products to dollar-based customers."
"Moreover, as one insightful analyst noted, there is a difference between international exposure and non-dollar exposures. Of the S&P 500 with the greatest foreign exposure, 63% of those that reported beat consensus earnings expectations. About half of the purely domestic companies have beat expectations thus far."
Key Quotes:
"Fears that the US S&P 500 would report the first decline in income since 2009 have eased. "
"One of the key reasons is that operating margins appear to have improved more than anticipated. Many had seemed to exaggerate the impact of the dollar's appreciation. It is true that many corporations have cited the dollar's rise as a factor dampening the value of their foreign sales. However, many analysts have confused this with a comprehensive evaluation."
"As we have argued, the US does not have an export-oriented model like Germany or China."
"...The US companies have pursued a direct investment strategy of build and selling abroad. Analysts appear to have under appreciated the savings achieved by affiliates of US companies that manufacturer outside the US, but sell their products to dollar-based customers."
"Moreover, as one insightful analyst noted, there is a difference between international exposure and non-dollar exposures. Of the S&P 500 with the greatest foreign exposure, 63% of those that reported beat consensus earnings expectations. About half of the purely domestic companies have beat expectations thus far."