While investors worry about the impact tariffs will have on profits, currency issues are scaring companies more so far.
Early results from third-quarter earnings season show that more executives are citing foreign exchange pressures than the tariff battle in which the U.S. has found itself with its trading partners, according to a FactSet examination of conference call transcripts.
With just 24 companies in the S&P 500 reporting so far, the sample size is small. But it's a trend worth watching as investors look for any sign that could derail what otherwise should be a stellar season. FactSet expects a 19.1 percent profit gain from the same period a year ago for the index.
So far, 15 of the 24 reporters, or 60 percent, cited foreign exchange issues at some point during their conference calls as a negative factor either in the previous quarter or for the future. That's a 25 percent rise from the third quarter in 2017, FactSet's John Butters noted.
A strong dollar hurts global companies by reducing their foreign earnings when translated back into dollars as well as making their products more expensive overseas. The ICE U.S. Dollar index, which tracks the greenback versus a basket of major currencies, is up 6 percent in the last six months.