With global outlook weak, many U.S. companies tighten belts

Mon Oct 26, 2015 1:50pm EDT
 
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By David Randall

NEW YORK (Reuters) - U.S. companies are far from optimistic that next year will see them get a break from the tough economic and market conditions they have faced in 2015. And that may well hurt capital investment and jobs growth.

In the first three weeks of October, 165 American companies have cited the slowing global economy in their outlooks for earnings and revenue. That is up from 108 in the same period last year, and 97 in the year-earlier quarter, according to an analysis of earnings reports by Thomson Reuters.

Among the phrases that have appeared in many of those statements are “challenging macroeconomic environment,” or ”global headwinds."

Earnings and revenue have been depressed this year largely because of the strong dollar, economic weakness in China and Brazil, and tumbling oil and commodities prices.

The rise in the value of the American currency means that profits earned in foreign currencies are worth less when translated into dollars, possibly making American exports less competitive.   Continued...

 
A U.S. flag hangs above the door of the New York Stock Exchange August 26, 2015.  REUTERS/Lucas Jackson