This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Third-Quarter Earnings Are Old News Already

Stock quotes in this article: PG, GE, AAPL, AMZN, CAT, KO, GOOG

BOSTON ( TheStreet) -- The dollar giveth and the dollar taketh away. Just ask big U.S. companies that rely on international sales.

With third-quarter earnings season under way yesterday, investors should keep an eye on large-cap multinational companies such as Procter & Gamble (PG) and General Electric (GE), and what executives reveal about business in the fourth quarter due to the strengthing U.S. dollar.

Many large U.S. companies that derive a substantial amount of revenue from abroad have enjoyed the benefits of a weaker dollar, which makes their products more competitive. Now, however, a stronger dollar may move against them, even as third-quarter financial results are seen beating analysts' expectations. Alcoa (AA), a member of the Dow Jones Industrial Average, kicked off earnings season yesterday. The aluminum maker said earnings trailed analysts' estimates.

Third-quarter results likely will be "decent," says Paul Nolte, director of investments at Dearborn Partners, a Chicago-based investment firm with $3 billion in assets under management. But executives will have plenty to say about negative trends, particularly in the movement of the dollar, they're seeing that carried over from the end of the third quarter into the fourth.

"You need to focus not on what has happened but what companies are talking about going forward," Nolte says. "One of the headwinds will be the stronger dollar. We've had a stronger dollar over the last three months or so, and that could put the ding in some of the earnings of the very large multinationals. The commentary about the fourth quarter will be extremely important."

The euro trades at $1.36, down sharply from three months ago due to the debt crisis in Europe. In the past week, Goldman Sachs analysts became the latest firm to cut its year-end forecast for the euro to $1.38 per U.S. dollar, down from $1.40. Others are more bearish on the euro, with Bank of America/Merrill Lynch analysts calling for the euro to sink to $1.30 per dollar by the end of 2011. Capital Economics forecasts no letting up -- the firm expect the euro to drop to $1.10 by 2013, according to a report by the Associated Press.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,804.71 -238.19 -1.40%
S&P 500 1,946.16 -26.13 -1.32%
NASDAQ 4,422.0850 -71.3050 -1.59%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs