Analysis: No rebound yet, but some U.S. companies see European bottom
By Ben Berkowitz
(Reuters) - The corner is far from turned in Europe, but for some U.S. companies there is a sense that they have reached - or can at least see - a bottom after years of weakness, a welcome change that could help boost profits in 2013.
The euro hit a fresh 14-month high on Friday after new data on European factory activity suggested the region was on track to start growing again this year, underlining the opportunity for well-placed U.S. businesses.
"The solid growth in Europe is encouraging in light of the economic headwinds that continued in the region," Kevin Farr, the chief financial officer of toymaker Mattel (MAT.O: Quote), said on a conference call on Friday.
It is not just toys, either. Software maker Citrix Systems Inc (CTXS.O: Quote) said last week that things had stabilized, partly as people grew accustomed to doing business in a rocky market.
"People are becoming more adjusted to the expectations, how to work with customers, how to think about backlog and the timing of getting individual transactions closed," Citrix CFO David Henshall said.
Strategists say that after years of delayed spending, and in some cases fruitless waiting for an economic turnaround, companies are now happy just to have Europe in a state where it is not eroding the bottom line.
"We don't expect or even want any growth from you as long as you don't hurt us," said JJ Kinahan, chief derivatives strategist at TD Ameritrade, of the general corporate attitude toward the Continent.
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