S&P 500 companies start facing up to the potential Brexit costs
By Noel Randewich and Caroline Valetkevitch
SAN FRANCISCO/NEW YORK (Reuters) - U.S. companies, facing investors in their first profit reporting season since Great Britain voted to leave the European Union, are broadly conceding that the so-called "Brexit" could weigh on earnings.
Wall Street investors were originally rattled by the Brexit vote and independent analysts have suggested it could cost U.S. companies billions of dollars in earnings due both to currency factors and also to lost sales in Europe. At least 49 of 85 S&P 500 companies with quarterly conference calls since the end of June have talked about Brexit.
On Thursday, GM said it was considering cost cuts in Europe to offset up to $400 million of potential headwinds triggered by Brexit.
"The result of the vote has adversely impacted the British pound and the uncertainty has put a strain on the UK automotive industry," Chuck Stevens, executive vice president and chief financial officer told investors.
Visa Inc (V.N: Quote), which completed its acquisition of Visa Europe last month, late Thursday said Brexit will affect currency exchange rates and economic growth in the short term, and that the vote has "introduced significant uncertainty."
FedEx Corp, in its annual report filed July 17, said Britain's exit could result in a global economic downturn, which could depress the demand for its services as well as create new trade regulations. Continued...