Apple’s Hedging Advantage Might Be Evaporating

Although the strong dollar has had a negative impact on Apple’s operations over the past several quarters, the company’s large FX hedging positions have provided major benefits as well. Stifel analyst Aaron Rakers recently took a look at Apple’s FX hedging situation headed into 2016.

2015 Benefits

Apple reportedly booked $4.144 billion of pre-tax FX gains in fiscal 2015. Stifel estimates that these gains resulted in an EPS boost of about $0.70 per share, or around 8 percent. These hedging gains dwarf those of rivals Microsoft Corporation MSFT 2% ($700 million), Alphabet Inc GOOGL 1.62% ($900 million) and International Business Machines Corp IBM 1.01% ($1.03 billion) during the same period.

2016 Estimates

Looking ahead, Stifel estimates…

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