David Lefkowitz, senior investment strategist at UBS, New York, estimates about 33% of U.S. multinational corporate profits come from overseas.
Wages are rising in China and India. And U.S. companies are focusing on domestic demand for consumer staples. Companies with global brands such as Procter & Gamble, Colgate, Starbucks, Nike and Apple want a strong presence in these markets.
Recent fiscal third-quarter 2011 earnings call reports by corporate chief financial officers of Coca-Cola, Emerson Electric, General Electric and Estee Lauder say they are aggressively pursuing ventures in the region. Meanwhile, New York Life and MetLife have opened up shop in India and China, hoping to capitalize on the burgeoning demand for life insurance.
"Earnings from abroad have increased over the years and become more important to U.S. companies," Lefkowitz says. "It makes sense. Wages are rising in the emerging markets, and consumer demand is strong."