The company said its results were affected by a shorter fiscal year, by a decline in rental revenues, negative foreign currency exchange rates and a smaller store base.
For economic perspective, there will be negative effect of foreign exchange market fluctuations on international trade, trade balances and country competitiveness.
The company has also narrowed and raised its full-year 2016 revenue range to be between $39.7 billion and $40.2 billion, including an approximately 2% negative impact from foreign exchange.
Overall, revenues at Media Networks declined 2% y-o-y, due to an advertising decline as a result of the negative impact of foreign exchange rates on international operations.
According to (Walid et al. 2011), the negative effect of foreign exchange market volatility on stock market may reduce country's competitiveness, international trade and trade balances.
Merck also announced that it has narrowed and raised its full-year 2016 non-GAAP EPS guidance to $3.71 to $3.78, including an approximately 1% negative impact from foreign exchange at mid-October exchange rates.
These results in line with number of studies like (Aloui 2007; Walid et al. 2011; Yang and Doong 2004), which reported negative effect of foreign exchange rate volatility on stock returns.
Meanwhile, he adds, the negative impact of foreign exchange that left net premiums written in original currency in its Foreign General Insurance Group, rising only 8.2% in the first quarter, won't resurface.
Like Apple, Amazon was quick to address the negative effects of the unfavorable foreign exchange rate fluctuations, noting in the report that there was a "$1.2 billion unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter".
In the previous one-year period, when the dollar was still riding high, foreign exchange displayed a negative nominal return of 11.3percentt.
