Sales: 866.322.8738Support: 877.322.8738
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“The decline in adjusted EPS of 4.3% vs. the prior year was entirely due to the negative impact of movements in currency rates in the translation of our results, particularly the weakening of the euro compared to prior year.” –Johnson & Johnson (April 14, 2015)

Coming into the Q1 earnings season, there were concerns in the market regarding the impact of the stronger dollar relative to the euro on U.S. corporate earnings for the first quarter. With the final DJIA components (Home Depot and Wal-Mart Stores) reporting results for Q1 this past week, how did companies in the DJIA perform in the first quarter in Europe in terms of sales? How did the revenue numbers for Q1 2015 compare to prior quarters?

Overall, 12 of the 30 companies in the DJIA provided revenue growth numbers for Europe for the first quarter. Of these 12 companies, nine reported a year-over-year decline in revenues. This number was above the number of Dow 30 companies reporting a year-over-year sales decrease in the previous quarter (8). In fact, this was the highest number of Dow 30 companies reporting a year-over-year decline in revenue from Europe since Q4 2012 (9).

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The stronger dollar was clearly a key factor in the weaker revenue performance in Europe. Of the 12 companies in the DJIA that provided revenue growth numbers for Europe, 11 cited a negative impact on revenues or EPS (or both) for Q1 due to unfavorable foreign exchange during their earnings conference calls. Seven of these 11 companies specifically discussed the weakness of the euro relative to the dollar during these same earnings calls.

Read more about earnings trends in this edition of FactSet Earnings Insight. Visit www.factset.com/earningsinsight to launch the latest report.

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Senior Earnings Analyst
John’s weekly research report, Earnings Insight provides analysis and commentary on trends in corporate earnings data for the S&P 500, including revisions to estimates, year-over-year growth, performance relative to expectations, and valuations. He is a widely used source for the media and has appeared on CNBC, Fox Business News, and the Business News Network. In addition, he has been cited by numerous print and online publications such as The Wall Street Journal, Financial Times, The New York Times, MarketWatch, and Yahoo! Finance.

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