The latest Quarterly report shows Canadian Rev at US$305M out a total of US$3510M, or about 8.7%.
in 1997 Canada represented 9% of total Rev (1.37B)
in 1996 it was 10% (1.23B)
in 1995 it was 11% (1.14B)
the reliance on Canadian Rev is less and less each year.
I think it is safe to say that on the expense side, Canadian dollar expenses are are much greater than 9% so when the US$ gains against the CAN$, Nortel *should* be happy...
*but*, from the 1997 report...
[Net] was also impacted by significantly higher foreign exchange losses and higher minority interest compared to 1996.
and...
Nortel continues to expand its business globally and, as such, an increasing proportion of its business will be denominated in currencies other than United States dollars. As a result, fluctuations in foreign currencies may have an impact on Nortel's business and financial results. Nortel endeavors to minimize the impact of such currency fluctuations through its ongoing commercial practices and by attempting to hedge its exposures to major currencies. In attempting to manage this foreign exchange risk, Nortel identifies operations and transactions that may have foreign exchange exposure, based upon, among other factors, the excess or deficiency of foreign currency receipts over foreign currency expenditures in each of Nortel's significant foreign currencies. Nortel's significant currency flows in 1997 and 1996 were in United States dollars, Canadian dollars, United Kingdom pounds, and French francs. In 1997, the net impact of foreign exchange fluctuations was a loss of $50 million as compared to a loss of $44 million in 1996.
Interestingly, in 1997 the C$ opened the year at ~73.4 quickly rose to ~75.2, but then dropped steadily to ~70.0 by year end. agtrain.com
So a falling C$ in 1997, assuming it did help Nortel's bottom line, didn't offset the other currency losses for the year.
Conclusion? Beats me, but it looks like a falling C$ doesn't play a big factor in Nortel's success one way or the other. Then again, that's probably the effect all the hedges Nortel makes on the currency markets are trying to achieve in the first place... |
