Regency Associates says quarterly earnings season has gotten off to a rocky start with two of the biggest corporates in the US reporting results that missed Wall Street estimates. Pharmaceuticals-to-medical devices giant, Johnson & Johnson, beat forecasts on earnings but revenues came in lighter than expected. The company’s earnings reported cited the impact of a strong US dollar on its overseas income as overshadowing higher sales of its older brand-name drugs which have a strong loyal following.

Net profit slipped to $3.36 billion or $1.20 a share from $4.75 billion or $1.66 a share in the same quarter last year. Revenue, however, skidded to $17.1 billion against $18.47 billion in the same period last year.

“The strong dollar is playing havoc with companies who earn a significant slice of their income from activities abroad,” said Shem Orbison, chief economist at Regency Associates. “One or two companies like Nike have weathered the situation quite well but we’re expecting this pattern to be repeated as reporting season progresses,” he added.

Banking behemoth JP Morgan posted earnings that disappointed Wall Street. Reporting $1.32 a share against expectations of $1.37 and revenue of $23.54 billion compared with estimates of $23.69 billion, the largest US bank saw its shares tumble by 2%.

Jamie Dimon, the bank’s CEO blamed the “decent” results on a “challenging global environment” and low interest rates as well as sluggishness in the bank’s trading unit.

Regency Associates says it is expecting earnings reports from the likes of Bank of America, Wells Fargo and Citigroup to show evidence of similar headwinds. “Poor earnings could potentially lend weight to the case for the Fed to hold off raising rates but we think it would take another poor earnings season to make the case for more stimulus,” explained Orbison.

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