AAII Investor Update: Put an Asterisk by Second-Quarter Results

Posted on July 27, 2012 | Investor Update

If there is a common theme we are seeing in second-quarter earnings reports, it’s the adverse impact the stronger dollar and the weaker global economy are having. Many companies are blaming both for dampening profits.

The slowing economy is curtailing spending. Earlier this week, truck manufacturer Paccar (PCAR) said its customers are choosing to hold onto aging trucks for a longer period of time, rather than replace them. The stronger dollar is hurting companies ranging from PepsiCo (PEP) to United Technologies (UTX). My colleague Wayne Thorp and I both feel like each earnings report we look at has a profit number that has been adjusted to offset the impact of currency translation.

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