Proctor & Gamble Co. (NYSE:PG) and Pfizer Inc. (NYSE:PFE) are both struggling with their earnings due to Venezuela’s currency restrictions, Bloomberg reports. This led Pfizer Inc. and Clorox Co. (NYSE:CLX) to say that earnings will continue to be impacted in the coming quarters.
As Venezuela’s currency — the bolivar — continues to weaken, companies with foreign headquarters are having difficulty trying to repatriate cash at the official exchange rate. Venezuela has devalued the bolivar five times in the past nine years and will attempt to weaken the bolivar again this year. According to analysts, Venezuela hopes to boost revenue and narrow the budget deficit.
Steve Robb, CFO of Clorox, says that the situation in Venezuela comes with the territory. “That’s the challenge of emerging markets — when it’s good, it’s great, when it gets bad, it can get really bad, and we’re certainly seeing that in Venezuela,” he says. Clorox lost $3 million in three months due to the devaluation, and other companies are also taking a big hit.