Tuesday, July 14, 2009

S&P 500 Companies Increase Foreign Sales and Foreign Taxes Paid

Standard & Poor's reports that companies in the 500 Index increased the percentage of sales outside of the U.S. to 47.9% in 2008 versus 45.8% in 2007. Downward pressure on the U.S. Dollar is likely if unrestrained deficit spending continues in the in the U.S. This weaker Dollar scenario would benefit companies that generate a large portion of their sales outside the U.S.

In addition to the increase in foreign sales, S&P "...determined that foreign income taxes increased $11.5 billion or 9.3%, while U.S. federal income taxes declined $43.9 billion or 29.1%, in fiscal 2008." This increase in foreign taxes paid is in spite of the fact the U.S. has a higher tax rate than most foreign countries. Congress should take note of this as more multinational companies are moving their domicile outside the U.S. due to unfavorable proposed corporate tax legislation rhetoric coming out of Washington, D.C.

Essentially, only two sectors saw a decline in the foreign sales component: energy & utilities. For the information technology sector, foreign sales in 2008 were basically flat compared to 2007.


S&P: Foreign Sales by U.S. Companies Continue to Rise (PDF)
Standard & Poor's

By: David Guarino and Howard Silverblatt
July 14, 2009

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