Brunswick Corp. executives reacted favorably to the rallying euro Thursday during a second-quarter earnings call with investors.
Brunswick CFO Peter Hamilton joked with investors that European Central Bank president Mario Draghi was his “new best friend” after Draghi reaffirmed his commitment Thursday to salvage the struggling euro, creating a rally for the currency.
Exchange rates “had a modest negative impact on operating costs, compared to the prior year, which reflected a mix of favorable and unfavorable exchange rate movements,” Hamilton said during Thursday’s quarterly earnings conference call. “We estimate the currency will have a similar impact on the full year’s earnings and sales unless exchange rates change significantly from current levels.”
“They’re changing as we speak,” Hamilton added, “for the better.”
“Mr. Draghi is my new best friend,” Hamilton said later in the call.
The euro climbed against the dollar by the most in nearly a month after Draghi said policy-makers “will do whatever it takes to preserve the euro,” according to news reports.
The currency jumped as high as $1.2329, up from $1.2152 late Wednesday, according to MarketWatch.com. It’s the biggest one-day percentage advance since June 29, according to FactSet.
Analysts interpreted that to mean the central bank’s ready to resume purchases of Spanish and Italian government bonds, sending yields down sharply, the publication reported.
Exporters favor a weaker dollar against other currencies, particularly markets in which they have a strong presence, because it makes buying foreign goods more affordable than domestically produced products.
Europe is Brunswick’s largest export market, but with ongoing economic pressure in the eurozone, sales have been down.
Mercury Marine’s engine sales were down 19 percent for the second quarter of 2012, compared with the second quarter of 2011.
Brunswick Boat Group experienced a 6 percent decline in fiberglass outboard sales in Europe during that time frame and a 5 percent decrease in fiberglass sterndrives, according to the earnings report.
Click here to read more about Thursday’s exchange rate.