U.S. companies get hurt by sanctions targeting Russia

By Adam Shell, USAToday


AP FILE
John Deere lowered its profit forecast for the rest of its fiscal year, placing part of the blame on slower sales of tractors and other equipment in Russia, Ukraine and other ex-Soviet republics related to the economic sanctions levied against Russia. (Seth Perlman, AP)
The economic sanctions the United States imposed on Russia over the Ukraine crisis don’t hurt only the Russian economy. They hurt some U.S. companies that do business in Russia, too.

John Deere, which makes heavy farm equipment and has two factories in Russia, was the latest company to blame weaker sales on economic sanctions. Despite beating its fiscal second-quarter earnings by 16 cents, the company best-known for its green and yellow tractors, cut its full-year outlook, saying sales of its tractors and harvesters would fall “significantly” in Ukraine, Russia and other ex-Soviet republics. The company cited credit restrictions by its customers there for the weak outlook.

Shares of John Deere were down 2.2% to $91.58.

The United States and European Union are trying to pressure Russia into dialing back its involvement in the political affairs of Ukraine by imposing economic sanctions that target banks and dozens of officials.

U.S. companies view Russia as a “growth” market, and they do about $40 billion worth of business annually with Russia.

A man and a little girl look at a closed McDonald’s in the Crimean capital, Simferopol, on April 4. The U.S. fast-food giant said it was temporarily shutting its three stores in Crimea after the Ukrainian peninsula’s annexation by Russia. (YURIY LASHOV, AFP/Getty Images)

After Russia’s annexation of Crimea, McDonald’s closed three of its fast-food outlets there. The company said it had to cut evening hours in some stores in the region because of less foot traffic. The hamburger giant has more than 400 stores in Russia and gets roughly 9% of its revenue there.

DuPont, which has a big agriculture business, said its customers in Ukraine are deferring or reducing seed purchases because of difficulties in obtaining credit. Visa and MasterCard also feel the pain as sanctions levied against a handful of Russian banks forced them to stop servicing those banks. Bank customers that hold Visa or MasterCard credit cards can’t use them to make purchases.

 

 

Advertisements

About Alexander Gordin
An international merchant banking professional with over twenty years of business operating and advisory experience in the areas of export finance, international project finance, risk mitigation and cross-border business development. Clients include foreign governments, municipalities and state enterprises as well as Fortune 500 and small/medium enterprises. Strong entrepreneurial instincts, combined with leadership and strategic skills. Transactional and negotiations experience in over thirty five countries. Author of the highly acclaimed "Fluent in Foreign Business" book and creator of the "Fluent in OPIC", "Fluent in EXIM","Fluent In Foreign Franchising", "Fluent in FCPA",and "Fluent in USTDA" seminar/webinar series. Currently developing "Fluent In ......" seminars and publications. Co-author of the Fi3 Country Business Appeal Indices. Extensive international business development and project finance transaction experience in healthcare, aerospace, ICT, conventional and alternative energy infrastructure, distribution and hospitality industries. Experience managing international public and private corporations. Co-Founded three companies abroad. Strong Emerging and Frontier Market expertise. Published and featured in numerous publications including: The Wall Street Journal, Knowledge@Wharton, NBC.com, The Chicago Tribune, Industry Week, Industry Today, Business Finance, Wharton Magazine Blog, NY Enterprise Report, Success magazine, Kyiv Post and on a number of radio and television programs including: Voice of America, CNBC, CNNfn, and Bloomberg. Frequent speaker on strategy, cross-border finance and international business development. Executive MBA from the Wharton School at the University of Pennsylvania. B.S. in Management of Information Systems from the Polytechnic Institute of NYU. Specialties Strategic Management Advisory, Export Finance, International Project Finance & Risk Management, Cross-border Negotiations, Structured Finance transactions, Senior Government and Corporate officials liason

One Response to U.S. companies get hurt by sanctions targeting Russia

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

The Ship Modeler

Ship Modeling News from Clare Hess

Site Title

“Love recognizes no barriers. It jumps hurdles, leaps fences, penetrates walls to arrive at its destination full of hope.” — Maya Angelou

Museum of International Trade & Merchant Banking (MoMBIT)

chronicling the importance of international trade and merchant banking in the global development

Fluent In Foreign Business

Helping To Grow Your Business Abroad

Emerging Market Insights

How to make a killing in Emerging Markets without losing your shirt?

Ideas That Work @ GIDASPOV.COM

Strategy | Creativity | Innovation | Fundraising | Marketing

Nu Leadership Revolution Blog

“Helping Emerging Leaders Gain the Competitive Advantage in the Future"

Mike Z's Blog

Exploring the causes of cancer throughout the world

Bucket List Publications

Indulge- Travel, Adventure, & New Experiences

FranchisEssentials

Sharing Information, Insight and Perspective about Franchising, Small Business and Entrepreneurship

bizrisk.wordpress.com/

We Help Insurance Agencies Stand Out

The WordPress.com Blog

The latest news on WordPress.com and the WordPress community.

%d bloggers like this: