The first quarter ended two weeks ago, which means most of the publicly traded companies of corporate America will announce their quarterly financial results over the next month.
Through April 9, 24 of the S&P 500 companies had already announced the financial details of their first quarter.
FactSet thumbed through these earnings releases and listened to the earnings conference calls to see what managements were complaining about.
“Based on the earnings calls to date, the stronger US dollar has been cited by the most companies in the index as a factor that either had a negative impact on earnings or revenues for Q1, or is expected to have a negative impact on earnings and revenues in future quarters,” FactSet’s John Butters said. “Of the 23 companies that have conducted earnings calls to date for Q1, 16 (or 70%) cited some negative impact or expressed a negative sentiment about the stronger dollar during the conference call.”
A strong dollar is problematic for multinational companies as the value of their overseas earnings deteriorate from the US perspective. Furthermore, the strong dollar makes US exports more expensive and therefore less competitive in the international marketplace.
In a far second, there was the West Coast Port where labour strikes disrupted the flow of traded goods. Those disruptions have been resolved.