Newly released research by Ernst & Young, shows that in the September quarter, 11 US companies cited the weakening dollar in their profit warnings. For many exporters and companies with significant US operations, the weak dollar will continue to drag on profits as 2007 draws to a close.
The report shows profit warnings from UK-listed companies in the third quarter (Q3) remained stable at 86, compared with 88 in Q2 and 85 in Q3 2006.
Andrew Wollaston, Ernst & Young corporate restructuring partner, said he had been expecting a correction in the debt markets for some time.
'In our view, the "credit crunch" will begin to impact UK consumer confidence and therefore consumer demand in the current quarter,' he said. 'Looking forward, UK plc needs to factor this into forecasts to avoid a rise in profit warnings in Q4 this year.'
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