2014: High dollar exchange rate harms business of software developers
On December 19, 2014 the research agency Jefferies published analysis results of influence of currency rates on software market situation. Experts reported that the strong dollar negatively affects financial results of activity of the American software companies whose services and products are widely provided abroad.
From September to December, 2014 dollar exchange rate in relation to a basket of foreign currencies rose by 6%. If this growth continues what analysts do not doubt, to the third quarter 2015 each developer of software from the USA will not get on average 4% of revenue concerning values of October-December of the 2014th, analysts predict.
The strong dollar undermines revenues of the American software developers
So negative effect will become the largest for the market for the last 15 years and can lead to the fact that shareholders of software firms will begin to get rid of actions, report in Jefferies.
Such American IT giant as Oracle or Microsoft, considerable part of revenue generate abroad. In the countries where high dollar exchange rate takes place, products of these companies become more expensive and, as a result, less attractive. Besides, adverse exchange rate fluctuation negatively affects when translating revenue of the companies from local currency in dollars, notes the The Wall Street Journal edition.[1]
According to the results of the second quarter of 2015 financial year (September-November of the 2014th) revenue of Oracle without influence of currency rates grew by 7% year on year, but taking into account strong dollar rose by only 3.5%. One of chief executive officers of the company Safra Catz was recognized that influence of variability of currency value was much stronger, than she expected.
According to analysts of Jefferies, they corrected estimates on revenues of 10 software companies (including Microsoft, VMware, Adobe, Oracle and Red Hat) adjusted for strong dollar.
Before HP announced that in 2015 financial year which will last till October, 2015 the company will not be able to increase sale taking into account exchange rate fluctuation.
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