General Mills and Oracle have noted that the strong dollar has hurt their finances. That’s because they sell goods overseas in the local currency, so the sale looks smaller once it’s translated into dollars. General Mills also said last month that Venezuela’s currency devaluation would probably cut its earnings per share to the low end of its guidance.
3M is another example, with almost two-thirds of its revenue coming from outside the U.S. Known for its Scotch tape and Post-it notes, it has much larger businesses making industrial adhesives, ceramics, safety gear, and even roofing shingles. Its shares were down 3 percent on Friday, even though analysts are predicting profit and revenue growth when it reports results.
3M’s fastest revenue growth has been outside of the U.S.
On Tuesday, Europe-based consumer goods giant Unilever said fourth-quarter sales slowed because of weakness in emerging markets. The decline was mostly because of unfavorable currency moves.
“So when emerging markets sniffle, large cap companies can catch a cold,” said Lawrence Creatura, a portfolio manager with Federated Investors.