How Brexit might actually play out

U.S. executives weigh what it means for them

Panic reigned when Brexit happened. But the message from U.S. companies so far is that investors should relax.

Of the 15 companies in the Standard & Poor’s 500 that have discussed the United Kingdom’s exit from the European Union in the two weeks since the vote, most executives have indicated Brexit is more of a scary headline than an actual business worry, according to a USA TODAY analysis of data from S&P Global Market Intelligence.

Packing maker Ball was a good example: “I don’t think it’s that big a deal,” Chief Financial Officer Scott Morrison told investors. “In terms of actually what happens on a day-to-day basis, I don’t think it’s that gigantic.”

Investors have largely assumed the worst since the U.K. voted to leave the EU. Investors shredded more than $3 billion in global stock wealth in the first two days following the vote, the biggest stock wealth destruction in history, Howard Silverblatt of S&P Dow Jones Indices says.

The stock market has

been trying to claw back from its massive 5.3% drop at the lows from the Brexit shock, but is still down nearly 2%. Companies that have spoken up about it, though, are downplaying the event.

The Brexit effects tended to fall into two categories:

None. Brexit “was a nonfactor” in terms of Ford’s June sales, Mark LaNeve, vice president of U.S. Marketing, told investors. Sales “ironically” actually turned “really strong ” during the final week of June when the Brexit headlines and stock market reaction intensified, he said. “Our performance was very strong in the last week (of June) compared to the first three weeks of the month,” he said. CEO of payroll processor Paychex Martin Mucci had a similar message: “We don’t see much.” Willis Towers Watson, a business consulting firm, got a quarter of its revenue last year from the U.K., but CEO John Haley was more positive than cautious when speaking to investors. “I would say we would expect no direct impact from Brexit,” he said. Minor. Gordon Stetz, chief financial officer at spice company McCormick, told analysts that the “immediate impact” of Brexit would be a 3% drag on earnings from currency rates. The company got 8% of revenue from the U.K. in fiscal 2015. Cruise line operator Carnival’s chief financial officer David Bernstein told investors the British pound accounts for 30% of currency exposure. Even so, a 10% change in the value of the British pound would hit earnings by just 2%. Electric power company AES, which has a business in Ireland, was “reasonably well hedged” before the Brexit vote, according to CFO Thomas O’Flynn, so moves by the euro and pound will have “modest” effects on business, he says.

It’s possible Brexit could still turn into something more akin to the economic upheaval that investors feared at first.

Some executives, especially right before the vote, indicated they would be watching closely. It’s also possible the executives who are more concerned aren’t talking yet.

But right now, most executives with comments are mostly optimistic Brexit won’t be the disaster some had thought.

“We are ... both hopeful and optimistic that the various governments involved will act responsibly and get a good deal for everybody,” Haley said.

“In terms of actually what happens on a day-today basis, I don’t think (the Brexit effects are) that gigantic.” Scott Morrison, Ball chief financial officer