Tags: Europe | Woes | US | Companies

CNNMoney: Europe's Woes Spill Over to US Companies

Tuesday, 24 Apr 2012 08:15 AM

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More American companies are reporting lower sales and lowering expectations as Europe's problems reach the United States.

Kellogg, shoe-seller Wolverine World Wide, and cleaning-equipment maker Tennant all cited the dour situation in Europe as they reported lower earnings and sales forecasts, CNNMoney reported.

"The European debt crisis made it more difficult for Tennant customers to obtain credit," stated Tennant, which missed its forecasts.

Kellogg CEO John Bryant said his company has "significant challenges" in Europe.

Wolverine announced that its sales outlook is "tempered by macroeconomic and financial uncertainty in Europe."

Stocks of all three companies fell Monday.

Investors will probably be hearing about more companies missing forecasts and lowering expectations as they reveal their quarterly results.

"It's almost impossible for Europe to not be a problem for earnings going forward," said Bill Stone, chief strategist with PNC Asset Management Group, according to CNNMoney.

Although Eaton, a manufacturer of auto parts, reported that its earnings beat forecasts, Eaton CEO Sandy Cutler said that its sales in Europe fell.

"The recession in Europe is going to be longer than anticipated," Cutler told CNNMoney.

Many experts see Europe in a downward spiral and austerity measures increase unemployment and decrease government revenue in the short term.

Although some financial experts are worrying about Europe's impact, earnings reports have so far been strong this spring, according to Fox Business Network. Quarterly profits of S&P 500 companies increased 10.4 percent as of the end of last week, Fox Business Network reported, citing Yardeni Research.

“Despite macro instability and subdued growth, companies continue to deliver exceedingly strong earnings results, yet skepticism remains given the uneven pace of recent economic data releases,” BMO Capital Markets strategies Brian Belski, wrote, in a note, according to Fox Business Network.


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