Breaking!!!! AP Now Declares Foreign Companies Suffering From Strong US Dollar!!!!

image

So, I read this article which really bugged me because I couldn’t understand WTF they were babbling about.  I thought, ‘perhaps I’ve had too many beers to see what they’re saying’. 

But, perhaps, someone else with more insight may still shed some light on this.  But, as of now, I’m simply calling it leftarded stupidity.  I realized, after looking at it from several angles that I was trying to understand the mind and thinking of a leftard, which is mindless venture, in an of itself. 

So, here’s the article ….

Strong US dollar hurts Q2 profits of Switzerland’s Novartis

BERLIN (AP) — Swiss-based pharmaceutical giant Novartis’ second-quarter net income dropped 32 percent over the same quarter last year, brought down primarily by poor performance from associated companies and negative effects of a strong U.S. dollar, the company said Tuesday

Net income was $1.856 billion, down from $2.723 billion in the same quarter in 2014. Net sales were down 5 percent to $12.694 billion and earnings per share from continuing operations dropped to $0.77 from $1.11 last year.

Nevertheless, CEO Joseph Jimenez said the company had a strong quarter for innovation with the U.S. approval and launch of two new drug products — heart failure drug Entresto and multiple sclerosis therapy drug Glatopa — and confirmed its full-year guidance.

Group sales are expected to grow by mid-single digits and operating income is expected to grow ahead of sales at a high-single-digit rate, Novartis has said.

“We are confident we will deliver on our priorities for the year,” Jimenez said.

Novartis said its core group’s net income was down 8 percent to $3.074 billion but would have been up 5 percent in constant currencies.

If the U.S. dollar maintains its mid-July strength for the rest of the year, it will contribute to a 9 percent drop in sales and 13-14 percent on core operating income, the company said.

What?

Over and over again, this leftarded news organization has told us at strong dollar harms US businesses and helps foreign companies because it’s more expensive to operate in the US.

But, as the article points out, Novartis is a Swiss-based company.  And, the Swiss Franc vs the US Dollar is remarkably stable, and has been for a while, as the chart above demonstrates.  (Just Google “Swiss Franc US Dollar and you can see it, too!)

I suppose, if all Novartis was trading in was US Dollars, then, they could have less Dollars than they previously had, but, that’s not relevant to the actual value of the income they had because the US Dollar is stronger (of more value) than it was previously …. or so say the traders.  Besides that, a huge portion of Novartis’ business comes from the US.  It isn’t like they lowered their prices to compensate for the higher value of the Dollar.  They absolutely didn’t do that. 

It’s mindless stupidity.   

Advertisements
This entry was posted in Economics. Bookmark the permalink.

7 Responses to Breaking!!!! AP Now Declares Foreign Companies Suffering From Strong US Dollar!!!!

  1. gator69 says:

    Spin to take heat off of the effects of Obamacare?

  2. DirkH says:

    “Net income was $1.856 billion, down from $2.723 billion in the same quarter in 2014.”

    When you express your income in Dollars, that makes perfect sense.
    I earn about 20 to 30% less this year than last year – in US Dollars. Of course I get paid in Euros, but I just prefer to tell you my wage in Dollars.

    • DirkH says:

      This also means that when a company earns money in a different currency, but it listed on the NYSE, and its market cap is measured in USD, it is 20 to 30% overvalued now if the stock quote stayed constant in Dollar terms and the revenue stayed constant in Euros.

  3. Bruce of Newcastle says:

    Actually I suspect the reason why they are having problems with the USD is not the CHF-USD crossrate but the USD-yen, USD-euro rates and etc. Those are their markets. The economic conditions in them are such that there is no way Novartis can raise prices in the local currency.

    I certainly know it here since the Oz dollar has fallen from 1.03 to 0.73 of a USD in 2 years, roughly a 30% fall. Or since currencies from the ruble to the yen to the peso all have declined the same amount it is really a rise in the USD.

    The problem is no one can raise prices at the moment. Our inflation number this week came in under estimates and well below the central bank comfort zone. Despite our dollar falling. That is because of exactly what I am saying: Chinese manufacturers are pegged by the yuan to the USD but they can’t raise Aussie prices as they get smashed each time they do it. So the biggest component of the inflation number this time was gasoline, cigarettes (due to taxes) and house prices (due to Chinese buying pressure).

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s