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Fiscal Q1 earnings season will kick off in about a month. There's growing anticipation of upward revisions among exporters due to the weak yen, which is trading at a 4.5-year low against the U.S. dollar and an all-time low against the euro.

In this post, I've gathered the forex forecasts for nine blue chip "exporters" with ADRs trading on the NYSE/Nasdaq -- with the exception of Nintendo (OTCPK:NTDOY).

In addition to comparing their forecasts versus current forex rates, I also listed their fiscal year (ended March) profits from forex with US$ values converted at ¥118/$1 for convenience. Lastly, I calculated their respective sales (and operating profits when available) by geographic segment from last fiscal year as a percent of total results.

The forex estimates in the second and third columns in the table below are for full year (fiscal) 2008 (ending in March). The "∆Current" columns refer to the amount the US$ and € are trading above the forecast of each company. Note "OP" stands for Operating Profit. The use of "Americas" typically includes the U.S., Canada and Mexico, but in some cases, may include S. America, or the U.S. standalone.

Click to enlarge table


Canon (NYSE:CAJ) has revised its forex forecast per its Q1 earnings release (a quarter ahead as the other companies were releasing FQ4 results). The forecast above is its revised version, compared to its prior estimate of ¥115/$ and ¥150/€.

It is hard to say if the expected gains from forex have been factored into their stock prices. It is equally difficult to estimate what quarterly forex gains might be.

Note a weaker yen causes prices of imported raw materials to increase, thus negatively impacting financials. Also, despite the discrepancy in the above forecasts versus current rates, it is still possible to report a forex loss, as some companies have, due to hedging activity. It goes without saying a weaker yen negatively impacts the prices of ADRs.

Forex profits should also be considered in light of re-investment in overseas local operations.

Don't forget the impact on cash and equivalents.

Note: The above data was compiled from fiscal year end earnings releases and is assumed to be accurate. Please verify any data before making trading/investment decisions.

Disclosure: The author does not own shares of any companies mentioned in this article.

Source: Japanese Exporters Look Poised to Profit from Weak Yen