George Soros: Europe is in Deep, Deep Trouble

George Soros: Europe is in Deep, Deep Trouble

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Billionaire businessman and financier George Soros recently said Europe is in worse shape now, and therefore more dangerous, than the US was in 2008. Can that be true?

Faced with the possibility of a Greek default and an already overwhelming financial crisis to overcome, the difference between Europe today and 2008 US is political unity, says Soros.

While America – a single entity with a single government and single leader – created a focused and cohesive goal to solve the problem, Europe is a mess of countries, problems, and goals, and lacks the unity in leadership to deal with the crisis at hand. As the saying goes, “there are too many cooks in the kitchen.”

The authority that the US used to handle the crisis is lacking in Europe. The U.S. Treasury Department in 2008 “helped devise and implement the myriad liquidity programs used to recapitalize big banks and reassure investors when questions arose over their stability and integrity of deposits.” (via CNBC)

Soros suggests a similar unified Treasury would go a long way in helping Europe get back on track. For Europe to do this, an institution needs to be in place that is “more creative” than the European Financial Stability Facility, which is understood to be improperly equipped to handle such an event. “I very much hope the heads of state of the member countries will recognize that,” he said. “That will open the way to containing the crisis.” (via CNBC)

He emphasizes the key necessity is to have liquidity in the event of a Greek default because timing liquidity with market crashes could prevent a chain reaction.

So, in the event Soros’ predictions come to pass (Greece defaults and the European community finds itself unprepared for the consequences) and his advice goes unheeded, we were wondering: which companies have a big exposure to European downturn?

Fortunately, The Street has created a list of the top ten US stocks which derive a large chunk of their revenue from European countries:

 

1. Edwards Life Sciences (EW, Earnings, Analysts, Financials): Edwards Lifesciences Corp. a leader in advanced cardiovascular disease treatments, is the number-one heart valve company in the world and the global leader in acute hemodynamic monitoring. Headquartered in Irvine, Calif. Current price at $76.87. Revenue from Europe Segment: $139.5 million, or 34.5% of total revenue, according to Edwards Life Sciences’ latest earnings release. Overall, the company had $404.5 million in revenue during the first quarter.

 

2. Paccar (PCAR, Earnings, Analysts, Financials): PACCAR Inc. is a global technology leader in the design, manufacture and customer support of high-quality light-, medium- and heavy-duty trucks under the Kenworth, Peterbilt, DAF and Foden nameplates. Current price at $35.73. Revenue from Europe Segment: $1.18 billion, or 36% of total revenue, according to the company’s first-quarter earnings report. Overall, Paccar had sales of $3.28 billion in the first quarter.

 

3. Dow Chemical (DOW, Earnings, Analysts, Financials): Dow Chemical Company is a science and technology company that provides innovative chemical, plastic and agricultural products and services to many essential consumer markets. Current price at $24.14. Revenue from Europe Segment: $5.36 billion, or 36.4% of total revenue, came from Europe, Middle East and Africa, according to Dow’s first-quarter earnings report. Overall, Dow Chemical had revenue of $14.7 billion in the quarter.

 

4. Pall (PLL, Earnings, Analysts, Financials): Pall Corporation is a leading supplier of fine filters, principally made by the Company using its proprietary filter media, and other fluid clarification and separations equipment for the removal of solid, liquid and gaseous contaminants from a wide variety of liquids and gases. Current price at $44.00. Revenue from Europe Segment: $240.4 million, or 37.3% of total revenue, according to Pall’s fiscal second-quarter earnings release. Overall, Pall had revenue of $645.2 million in the quarter.

 

5. Lexmark International (LXK, Earnings, Analysts, Financials): Lexmark International, Inc., together with its subsidiaries, engages in the development, manufacture, and supply of printing, imaging, document workflow, and content management solutions for offices in North and South America, Europe, the Middle East, Africa, Asia, the Pacific Rim, and the Caribbean. Current price at $28.36. Revenue from Europe Segment: $389.5 million, or 37.7% of total revenue, came from Europe, Middle East and Africa, according to Lexmark’s first-quarter earnings release. Overall, Lexmark had revenue of $1.03 billion in the quarter.

 

6. Philip Morris International (PM, Earnings, Analysts, Financials): Philip Morris International is the leading international tobacco company, with products sold in over 160 countries. They own 7 of the top 15 brands in the world and have a strong mix of international and local products that seek to appeal to a wide array of adult smokers. Current price at $63.97. Revenue from Europe Segment: $6.41 billion, or 38.8% of total revenue, before considering excise taxes on the product, according to the company’s first-quarter earnings results. Overall, Philip Morris had $16.5 billion in sales during the quarter before excise taxes.

 

7. McDonald’s (MCD, Earnings, Analysts, Financials): McDonald’s Corporation develops, operates, franchises and services a worldwide system of restaurants that prepare, assemble, package and sell a limited menu of value-priced foods. The company operates primarily in the quick-service hamburger restaurant business. Current price at $89.23. Revenue from Europe Segment: $2.4 billion, or 39.9% of total revenue, according to McDonald’s first-quarter earnings report. Overall, the restaurant operator had revenue of $6.1 billion.

 

8. Molson Coors (TAP, Earnings, Analysts, Financials): Molson Coors Brewing Company is world’s fifth-largest global brewer. The company has 15,000 employees worldwide, 18 breweries, and a broad portfolio of over 40 brands, including Molson Canadian, Coors Light and Carling. Current price at $40.00. Revenue from Europe Segment: $274.7 million, or 41.1% of total revenue, came from the United Kingdom, according to Molson Coors’ first-quarter earnings release. The company reports sales in three segments: U.S., U.K. and Canada.

 

9. Owens-Illinois (OI, Earnings, Analysts, Financials): The company produces glass containers for beer, ready-to-drink low alcohol refreshers, spirits, wine, food, tea, juice, and pharmaceuticals, as well as for soft drinks and other non-alcoholic beverages, including returnable/refillable glass containers. Its customers include the manufacturers and marketers of glass packaged products, such as brewers, wine vintners, distillers, and food producers. Current price at $16.35. Revenue from Europe Segment: $698 million, or 41.3% of total revenue, according to Owens-Illinois’ first-quarter earnings release. Overall, the company had $1.72 billion in revenue during the quarter.

 

10. Electronic Arts (ERTS, Earnings, Analysts, Financials): Electronic Arts Inc. operates in two principal business segments globally: EA Core business segment: creation, marketing and distribution of entertainment software and the EA.com business segment: creation, marketing and distribution of entertainment software which can be played or sold online. Current price at $21.40. Revenue from Europe Segment: $507 million, or 46.5% of total revenue, according to EA’s latest earnings release. Overall, the company had $1.09 billion in revenue during the fiscal fourth quarter.

 

(By Rebecca Lipman. Revenue data sourced from The Street.)

 

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