Posted by: Howard Silverblatt on June 4, 2010
I do an annual foreign report based on the S&P 500. Reporting requirements are poor, and companies are big on pictures and bad on tabular tables. The result is that only half the issues supply sufficient data for the report. What investors need is a matrix, similar to the one that shows the impact interest rates have on pensions, where we would know what is produced where, then where it is sold, and finally, where it is booked - and of course if there is any currency hedging going on against either the production or the sale. With that information we can quantify the impact of changing currencies, and then the impact on profits. I would put the chances of getting any of that at significantly less than the Giants and Jets meeting under a sunny sky in the 2014 Super Bowl. That all said (as it has been for years), I am attaching a list of several hundred S&P 1500 issues that have declared their 2009 fiscal sales, along with a few ratios. It will not permit you to create a matrix, but it’s all we get, so start with it.
Initial fiscal 2009 numbers show U.S. 2009 foreign sales in the S&P 500 slightly dropped from to 46.97% from last year’s 47.94%, after 5 years of increases. Foreign income taxes paid are again ahead of U.S. Federal income taxes, but at a lower rate: Foreign is 52.4%, down from 55.8% in 2008. European sales accounted for the largest share (slightly less than 30%) of declared foreign sales (or 14% of total sales).
There are several aspects for European sales. The S&P SmallCap600 has only 4% in European sales, but may benefit from imported component parts used in their product (which they may not have to pass along to their customers - capitalists), while larger issues may loose both on sales and translation, but be insulated by size. The full report will be issued in July (June is Pensions & OPEB - a 26% market gain in 2009 hasn’t helped that much; also in June are Q1 final cash and buybacks, and potentially dividends - it’s been a very good half).