North American companies reported $20.8 billion in currency value loss for the fourth quarter of 2018, according to a new report.U.S. medical and biotech companies hit especially hard.Getty ImagesMultinational companies based in North America reported a collective $20.8 billion currency value loss in the fourth quarter of 2018. That's according to a new report from Kyriba on currency losses quantified during quarterly earnings calls.
A strong dollar can create headwinds for U.S. companies reporting earnings from abroad. When foreign currencies are comparatively weak against the greenback, it takes more to buy U.S. dollars when translated into the home currency. The actual impact of foreign exchange is likely higher, as companies aren't required to report currency losses. Many companies report their revenue in "constant currency" alongside unadjusted figures.
"The impact of North American headwinds represents the most significant currency hit to top-line revenue in the last 12 quarters," said Wolfgang Koester, chief strategist for Kyriba. "The ongoing U.S.-China trade war as well as other geopolitical events such as Brexit have had the greatest negative impact on currency holdings."
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