This week, currency risk management software vendorFiREapps released its quarterly report on the impact of foreignexchange (FX) on corporate earnings. The report surveyed Q4/2016earnings reports from 1,200 large, publicly traded multinationalsbased in North America and Europe.

Of the 1,200 companies, 296 reported that currency shifts had anegative impact on their earnings in the fourth quarter. Amongcompanies that quantified this effect, the total impact was areduction in earnings of $10.47 billion. This is less than a thirdthe size of the total currency impact FiREapps quantified a yearearlier: $36.85 billion in Q4/2015. The FiREapps report attributesthis difference “not necessarily to lower currency volatility, butto the number of companies that appear to have not reportedmaterial impacts.” In Q4/2015, 409 companies reported negativecurrency impacts.

For the 29 percent of North American companies that reported anegative currency impact in Q4/2016, the average effect on earningsper share was $0.04 per share. This is down significantly fromQ3/2015 ($0.12/share) and Q4/2015 ($0.07/share), but FiREapps seesbest practice as keeping the target currency impact to just $0.01per share.

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