IBM Says Strong Dollar to Crimp 2015 Revenue More Than ExpectedAlex Barinka
IBM, which gets more than half its sales from overseas, said the impact of foreign-currency exchange rates will be greater this year than the technology-giant had previously anticipated.
International Business Machines Corp. expects currency swings to drag on revenue growth by more than seven percentage points in the first quarter, the company said Thursday in a filing. For the full year, the impact will be more than six percentage points, up from a prior forecast of five to six points.
A surge in the dollar is weighing on earnings at American companies from IBM to Hewlett-Packard Co. to Procter & Gamble Co. As the U.S. economy weathers a slowdown in global growth, its currency’s climb has made domestic goods and services more expensive overseas.
“The currencies have nearly all moved in an unfavorable direction for our business profile,” the Armonk, New York-based company’s Chief Financial Officer Martin Schroeter said on a conference call with analysts and investors last month. “Our hedges are designed to provide stability around the receipt of cash, but there is no year-to-year benefit in the income statement when a currency’s direction is sustained over a longer period.”
IBM is hosting its investor meeting Thursday in New York where Chief Executive Officer Ginni Rometty is outlining the company’s reinvention strategy for this year.