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More Dow 30 Companies Reported Decline In Sales From Europe In Q4
Perspective | 12 March 2015
By FactSet

“The third significant impact on McDonald’s global results for 2014 was in Russia and the Ukraine. During 2014, McDonald’s Europe experienced significant declines in company-operated margins driven by weakening currencies and economic slowdown and store closures in these two markets….We expect this currency impact to significantly pressure the segment’s company-operated margins again in 2015, especially in the first half.” – McDonald’s Corporation (23 January)

Coming into the fourth quarter earnings season, there were concerns in the market regarding the impact of weaker economic growth in Europe, the impact of the stronger US dollar relative to the euro, and the impact of the crisis involving Russia and Ukraine on US corporate earnings for the fourth quarter.

With the final Dow Jones Industrial Average (DJIA) component (Home Depot) reporting fourth quarter results in the last week of February, how did companies in the DJIA perform in the fourth quarter in Europe in terms of sales? How did the revenue numbers for 4Q14 compare to prior quarters?

Overall, 11 of the 30 companies in the DJIA provided revenue growth numbers for Europe for the fourth quarter. Of these 11 companies, eight reported a year-over-year decline in revenues.

This number was above the number of Dow 30 companies reporting a year-over-year sales decrease in the previous quarter (6). In fact, this was the highest number of Dow 30 companies reporting a year-over-year decline in revenue from Europe since 4Q12 (9).

On a sequential basis, nine of the 11 companies reported a lower year-over-year sales growth rate from Europe in 4Q14 relative to 3Q14. Five of these nine companies have reported lower year-over-year revenue growth for three consecutive quarters.

One bright spot for the DJIA in terms of sales performance in (Western) Europe was Nike. Of the 11 Dow 30 companies providing sales figures for Europe, Nike reported the highest revenue growth at 22 percent.

FactSet Research Systems is a leading provider of financial information and analytic applications to investment professionals around the globe. FactSet was founded in 1978 and is based in Norwalk, Connecticut, with operations in 23 locations worldwide. To learn more, visit www.factset.com.

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