April 18 (Bloomberg) -- The dollar's plunge helped boost first-quarter earnings at Coca-Cola Co., International Business Machines Corp. and Google Inc. and may continue to shield American companies from a slowdown in the U.S. economy.

The 6.4 percent decline against a basket of currencies in the quarter made U.S. products cheaper overseas and increased the value of foreign sales when they are converted to dollars. Economic growth in Europe, China and Brazil is outpacing the U.S., helping companies that get most of their revenue from abroad.

``You have a global economy that happens to be growing faster than the U.S. and a declining dollar that looks like it will continue to make new lows,'' said Brian Rauscher, director of portfolio strategy at Brown Brothers Harriman & Co. in New York. Investors are ``overly bearish'' and are overlooking the link between the dollar and global growth, he said.

The dollar has declined 6.1 percent against the currencies of its six biggest trading partners since Dec. 31 and is down 8.3 percent against the euro and 7.1 percent versus the yen. Today, the dollar rose 0.6 percent to $1.5818 per euro at 4:59 p.m. in New York and surged 1.2 percent to 103.67 yen.

Coca-Cola and IBM reported this week profits that beat analysts' estimates, helped by sales in Europe and Asia. Both get more than half their sales abroad.

Fueling Growth

Atlanta-based Coca-Cola, the world's largest soft-drink maker, said revenue, fueled by growth in China, India, Turkey and Mexico, jumped 21 percent to $7.38 billion, with 9 percentage points of the increase coming from the dollar's decline against other currencies.

IBM, the world's biggest computer-services company, said on April 16 that net income climbed 26 percent in the first quarter as sales in Europe, the Middle East and Africa rose 16 percent. Adjusting for the decline in the dollar, revenue from those regions rose 4 percent, IBM said.

IBM has reduced its dependence on U.S. customers by expanding in Brazil, Russia, India and China.

``There is demand for technology in geographies where growth rates are nothing short of spectacular, and that's keeping the market for technology pretty robust,'' said Peter Sorrentino, a senior money manager at Huntington Asset Advisors in Cincinnati.

EBay, Google

Online auctioneer EBay Inc. said April 16 that the weak dollar contributed to a 32 percent gain in overseas revenue in the first quarter, twice as fast as U.S. sales. International sales make up 53 percent of the San Jose, California-based company's revenue.

Google, owner of the most popular Internet search engine, yesterday said international sales jumped 55 percent in the first quarter, helping the company top analysts' earnings estimates. Without the change in currency rates, revenue would have been $202 million lower, the Mountain View, California-based company said.

The gains helped earnings defy some estimates. This week, Goldman Sachs Group Inc. predicted ``disappointing'' results for U.S. companies, saying they probably will slash profit targets through 2008 amid the U.S. slowdown.

Economic growth in the U.S. probably slowed to 0.1 percent in the first quarter, one-sixth the pace of the previous period, according to the average estimate of economists surveyed by Bloomberg.

End of Decline

Economists predicted this month that the U.S. economy won't grow in the first half of the year, the weakest performance since the 2001 recession, as consumers grapple with falling home prices and an 11 percent increase in gasoline since Dec. 31.

Germany expanded 0.5 percent in the first quarter, the Berlin-based DIW Institute said April 10. Export orders from eastern Europe and Asia may help cushion the euro region from U.S. woes, the International Monetary Fund said April 9.

Economic growth in Asia, excluding Japan, will remain ``robust'' this year with 7.5 percent growth, the IMF said. China's economy grew 10.6 percent in the first quarter, the country's statistics bureau in Beijing said on April 16.

While the dollar's weakness may keep corporate earnings afloat in the first half, economists say the U.S. currency will rebound by the end of 2008, shrinking the gains U.S. multinationals get from overseas orders. The dollar may strengthen to $1.47 against the euro by year-end, according to the median forecast of 42 analysts surveyed by Bloomberg.

``The U.S. dollar could still weaken a little bit further,'' said Don Alexander, director of fixed income in New York at Citigroup Global Wealth Management, which oversees about $1.3 trillion in assets. ``At some point this year, the market will realize that the worst is over for the U.S. economy, and the U.S. dollar will stabilize.''

To contact the reporters on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net; Haris Anwar in Toronto at hanwar2@bloomberg.net.

Last Updated: April 18, 2008 17:04 EDT