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More Dow 30 Companies Report Decline in Sales in Europe for Q2


By John Butters  |  August 28, 2015

"Foreign exchange impacts reduced sales by 7.3 percentage points in the second quarter. The most notable currencies impacting sales were the euro, yen and Brazilian real, which devalued versus the U.S. dollar by 20%, 17% and 28%, respectively." –3M (July 23, 2015)

Although the volatility in the stock market over the past week has been attributed in part to fears of slower economic growth in China, economic weakness in Europe remains a worry as well. According to FactSet Economic Estimates, real GDP growth in the Eurozone is projected to be 1.5% in 2015. 

Coming into the Q2 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 second quarter. With the final DJIA components (Home Depot and Wal-Mart Stores) reporting results for Q2 last week, how did companies in the DJIA perform in the second quarter in Europe in terms of sales? How did the revenue numbers for Q2 2015 compare to prior quarters?


Overall, 12 of the 30 companies in the DJIA provided revenue growth numbers for Europe for the second quarter. Of these 12 companies, 10 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 (9). In fact, this was the highest number of Dow 30 companies reporting a year-over-year decline in revenue from Europe since Q3 2012 (also 10).

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, all 12 cited some negative impact on revenues or EPS (or both) for Q2 due to unfavorable foreign exchange during their earnings conference calls. Six of these 12 companies specifically discussed the weakness of the euro relative to the dollar during these same earnings calls.


John Butters

Vice President, Senior Earnings Analyst, Investor Relations

Mr. John Butters is Vice President and Senior Earnings Analyst at FactSet. His 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, The Financial Times, The New York Times, MarketWatch, and Yahoo! Finance. Mr. Butters has over 15 years of experience in the financial services industry. Prior to FactSet in January 2011, he worked for more than 10 years at Thomson Reuters (Thomson Financial), most recently as Director of U.S. Earnings Research (2007-2010).