Highly International Northeast Companies Outperform More Domestic Counterparts
In the last six years, highly international Northeast based companies had robust average profit margins while companies in the same region with low levels of internationalization had considerably lower levels of profitability, according to a new report commissioned by HSBC Bank USA, N.A. (HSBC).
The report, ‘HSBC Spotlight on US Trade: Northeast’ shows the average profit margin in the Northeast for highly international companies was 7.7 percent over the period examined (2007-2012), while companies in the same region with low levels of internationalization were, on average, unprofitable during the same time.
The HSBC report analyzed the level of overseas sales and operations at top US publicly listed companies based in the Northeast and across the nation to understand the impact of international sales and operations on business profit margins by region and select sectors. Northeast companies with high levels of internationalization had the widest profit margin spread of all regions (10 percent), and double the average national profit margin spread of five percent. Companies by sector – consumer goods, healthcare, industrials and information and communication technologies (ICT) – also followed the trend.
“The findings underscore the impact a diversified geographic customer base can have on the profitability of a business,” said Paul Cronin, Executive Vice President, Northeast Corporate Banking for HSBC Commercial Banking in the US. “With sluggish domestic growth expected and increased global competition, more Northeast companies might want to consider global trade opportunities to grow.”HSBC Bank USA, N.A. recently announced a $1 billion, 18-month dedicated loan program for small and medium size US businesses looking to export or expand internationally, to help companies find global growth opportunities and to further accelerate global business growth by US enterprises. Not Just Higher, But More Stable Highly international Northeastern companies also had a stable upward trend in their average profit margins, growing robustly from 2007 to 2009, before settling at an average profit margin of 9 percent in 2012. By contrast, profit margins for low-international companies in the Northeast were extremely volatile, swinging from high levels of unprofitability in 2007 to 2008 before climbing back to profitability in 2009 and reaching an average profit margin of 6.5 percent in 2012. Additionally, low-international companies in the Northeast never outperformed their more internationally oriented peers.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
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.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
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.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV