Europe’s debt crisis is putting pressure on corporate earnings globally with companies from Procter & Gamble Co. to Danone cutting forecasts and signaling profits will fall at more companies this year.
Analysts predict members of the Standard & Poor’s 500 Index in the U.S. will report a 1.1 percent average drop in second-quarter earnings, after estimating a gain as recently as last month, according to data compiled by Bloomberg. That would be the first decline in 11 quarters after a 6.2 percent average increase in the first quarter. A stronger dollar is another threat to earnings as U.S. exports become more expensive.
P&G, the world’s largest consumer-goods company, cut its earnings and revenue forecasts last week for the second time in fewer than two months. For the fiscal fourth quarter ending this month, earnings per share excluding some items will be as much as 79 cents, down from a previous forecast for a maximum of 85 cents, Cincinnati-based P&G said. A year earlier, P&G reported adjusted earnings of 84 cents a share.
Memphis, Tennessee-based FedEx, operator of the world’s largest cargo airline, predicted profit will rise to $6.90 to $7.40 a share for the fiscal year through May 2013, compared with an average analyst estimate of $7.38.