U.S. companies with big sales in Japan like Aflac and Tiffany may see sales pinched in the wake of the country's massive earthquake, but the yen's recent sudden strength could offset those losses.

Take Aflac. It derives 76 percent of its sales from Japan. Last quarter, Aflac got a 6 cents-per-share lift from a rising yen. This quarter, it expects a bigger boost from forex gains.

Yet the shares of Aflac, Japan's No. 1 foreign insurer, fell 8.8 percent last week following news of the massive earthquake and tsunami. Earnings estimates have not been revised in the past two weeks, according to Thomson Reuters StarMine data.

But investors might be missing the surging yen's boost to profits.

Longer-term, slowed worldwide growth as a result of sapped demand from Japan could affect the earnings of S&P 500 companies, but so far analysts expect only a minimal hit to growth.

About 20 companies in the Standard & Poor's 500 index <.SPX> that break out sales by country have 10 percent or more of their sales in Japan, mostly in the technology, high-end retail and insurance industries. Others have substantial businesses, but only break out sales by region.

So far, markets are being driven by the pessimists.

The stock of luxury jeweler Tiffany & Co fell 9.3 percent this week, its worst week since May 2010.

Coach Inc , the high-end handbag and accessories company, lost 11.1 percent -- the stock's worst week since May 2009, on news of the disaster.

Both companies derive about one-fifth of their sales from Japan.


The currency impact will be quite positive -- they'll get higher revenues and their earnings will be better. The products look cheaper so it gives the Japanese more buying power and translates profits back at a higher rate, Morningstar analyst Paul Swinand said.

The problem is that people are going to be sitting around with their jaw wide open for we don't know how long.

Few companies have detailed the yen's impact on sales, though analysts at Bank of America-Merrill Lynch said the situation has tilted the balance from upside to downside risks to our EPS outlook. They maintained their estimates for the S&P 500 companies at $95 a share for 2011 and $102 a share for 2012.

In an attempt to minimize their exchange-rate risks, U.S. companies tend to hedge their currency exposure. But hedging carries costs and companies usually do not hedge 100 percent of their foreign-exchange exposure. They are also less likely to hedge against swings like the one last week when the dollar sank to a record low at 76.25 yen on electronic trading platform EBS.

Japan's crisis prompted massive yen buying from the speculative community, which was banking on the expectation of huge repatriation flows from Japanese insurers and investors anxious to contribute to Japan's reconstruction efforts.

Analysts said there has been no evidence of repatriation yet.

On Friday, the yen reversed some of its recent gains as several of the world's central banks sold the Japanese currency in a coordinated intervention to restrain the yen and calm market jitters.

Many questions remain about the disaster's impact on U.S. companies doing business in Japan.

There is still some uncertainty how events will play out in the near term. Japan will pretty much be closed for business and will be looking to rebuild, said Sri Raman, a senior quantitative research analyst at Thomson Reuters.

Japanese suppliers make much of the silicon and other materials used in chipmaking by Intel Corp and its competitors. A rising yen would mean higher costs.

Almost all of Intel's sales and most of its expenses are in dollars, and it hedges its exposure to foreign currencies.

A theoretical 20 percent adverse change in foreign-exchange rates in 2009 would have cost Intel, which derives 11 percent of its sales from Japan, under $40 million, regulatory filings show.

Micron Technology Inc , which has a plant making DRAM memory chips in Nishiwaki, Japan, estimated a 1 percent move in the exchange rate versus the U.S. dollar would expose it to foreign currency gains or losses of about $1 million for the euro and the yen.

Even after intervention, the dollar is off 0.7 percent against the yen since the end of 2010.

(Reporting by Caroline Valetkevitch, with additional reporting by Noel Randewich, Phil Wahba and Gertrude Chavez-Dreyfuss; Editing by Jan Paschal and Diane Craft)