Airbus, Pernod, Daimler Earnings Swell on Euro Drop

Discussion in 'Economics' started by ASusilovic, May 21, 2010.

  1. May 21 (Bloomberg) -- Airbus SAS, Pernod Ricard SA and Daimler AG are watching profits swell with every step of the euro’s decline.

    Each 10 cent drop in the currency adds 1 billion euros ($1.26 billion) to operating profit at Airbus, according to Chief Operating Officer John Leahy. Pernod increases earnings before interest and tax by 12 million euros with each 1 percent fall, Finance Director Gilles Bogaert said in an interview.

    As Greece’s fiscal crisis leaves politicians scrambling to halt the slump in confidence in the euro, European executives are totting up the gains. Two years ago, the currency shot to an all-time high of $1.60 as the U.S. economy sank into recession, squeezing margins on European goods sold overseas.

    “Because of massive growth in markets like the U.S. and China, we have a strongly growing currency exposure,” Daimler Chief Executive Officer Dieter Zetsche said in an interview in Stuttgart, Germany. “The fall of the euro is a benefit.”

    The 16-nation currency has dropped 13 percent since the start of the year and traded close to a four-year low of $1.2509 in New York yesterday. A 10 percent decline in the euro boosts profit at companies in the region by an average of 3 percentage points, estimates Stefan Hofrichter, chief economist at Allianz Global Investor’s RCM unit in Frankfurt.

  2. People drink more booze during bear markets too. :( :eek: :D
  3. That's more "convenient" for you this weekend. :cool: