The dollar’s surge is reducing earnings at American companies from Procter & Gamble Co. to Pfizer Inc. and DuPont Co. that make a large portion of their revenue abroad.
P&G, the world’s biggest consumer-products maker, Tuesay reported profit that missed analysts’ estimates in the quarter ended Dec. 31 after what Chief Executive Officer A.G. Lafley called “unprecedented” foreign-exchange rate fluctuations reduced sales by 5 percentage points. DuPont and drugmakers Pfizer and Bristol-Myers Squibb Co. all posted annual forecasts that trailed predictions, in part because of the dollar.
While 75 percent of Standard & Poor’s 500 Index companies have beaten analysts’ estimates so far this earnings season as the U.S. economy weathers a slowdown in global growth, the dollar’s advance is making American goods and services more expensive overseas, eroding sales. The greenback’s strength has taken some companies by surprise, prompting United Technologies Corp. to cut an annual outlook that was just a month old.
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