After doubling in the fourth quarter, the negative impact ofswings in foreign-exchange rates on corporate earnings is likely toworsen in the three months ending March 31.

That's the outlook of FiREapps, a Scottsdale, Arizona-basedcompany that advises businesses on reducing the impact of currencyvolatility.

For the 846 North American companies monitored by FiREappsduring the final three months of 2014, the average negativecurrency impact was 6 cents per share, more than double the averageof 2 to 3 cents for the prior two years.

“This volatile era shows the companies that don't have properrisk management practices in place,” said Wolfgang Koester, chiefexecutive at FiREapps “This quarter's reports, which will start inApril, will be even worse for some companies.”

The euro and yen were among the top five currencies mentioned bythe 1,200 firms globally monitored by FiREapps, in a report Monday.After a broad gain of 11 percent last year, the greenback hasstrengthened 14 percent versus the euro this year, helping sendvolatility projected by options last month between the twocurrencies to the highest since 2012.

Sixty-three percent of companies reporting currency headwinds onfourth-quarter earnings also fielded questions from analysts on thetopic during conference calls, the highest rate since FiREappsbegan tracking them four years ago.

In the fourth quarter, 215 of 846 North American companies'earnings calls monitored by FiREapps mentioned negative impactsfrom currency swings, up 6.4 percent over the prior three-monthperiod. The aggregated value of the negative hits for the Octoberto December period was $18.7 billion; over four times the $4billion in the previous quarter and the highest in four years.

For North American and Europe companies monitored last year,$39.5 billion in revenue was lost due to currency volatility. Morethan 110 companies cited movements of the euro against the dollar,up from 72 the prior quarter.

A JPMorgan Chase & Co. global currency volatility indexjumped to 11.68 percent earlier this year, its highest since June2013.

Sixty-seven percent of North American companies negativelyaffected during the fourth quarter predicted more headwinds in2015. Twenty-six percent gave guidance that currency impacts forall of 2015 would cut annual revenue by an average of 4.49percent.

“This volatility is not the new norm,” Koester said. “Thevolatility is actually going to increase further.”

Bloomberg News

Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.