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Rothbort: Blame It on the Forex

Scott Rothbort

Doug, earlier you mentioned in The Edge that while 60% of the S&P 500 companies reported top-line misses for the first quarter of 2009, many still beat on the bottom line. I don't dispute your data. Furthermore, I cannot argue that part of that disparity was due to the cost-cutting that took place. So far we are on the same page.

However, I have a different explanation that accounts for the top-line / bottom-line disparity -- foreign exchange. It seems that every single multinational in the S&P 500 (and otherwise) reported revenue shortages due to the extremely strong U.S. dollar in the reporting period. Almost every earnings report I read or call that I listened to had a negative impact of foreign exchange.

Thus while I can't deny the cost-cutting effect, I think it was trumped by the dollar effect.