Currency hedging, dollar costs and the potential for a deeper economic crisis stand between European exporters and any easy win from weakness in the euro currency.

The euro has lost 10% of its value against the dollar since late October and is close to a 16-month low at around 1.28, hit by mounting concerns over Europe's debt crisis and two interest rate cuts by the European Central Bank.

In theory, this should be good news for exporters to the United States, such as Ahold and Siemens, which benefit from a production cost base in euros and selling prices in dollars.

In fact, there are three reasons why a dollar upswing may not feed into extra profits for exporters.

Currency Hedging

Most companies that report earnings in euros but have sales in dollars take euro positions to protect themselves against any adverse move in the exchange rate. While forex positions can be adjusted if the euro weakens, existing hedges mean that it takes time for currency benefits to show in corporate earnings.

German car-maker Daimler, which generated around 25% of its revenue in the United States in 2010, has hedged two thirds of its dollar sales exposure for this year and one third of its exposure for 2013.

"Almost 80% of companies are hedged so the sensitivity on profits is very small, unless you have a very big swing," said Claudia Panseri, an equity strategist at Societe Generale.

Dollar Cost Base

The second factor is that many companies that have a significant portion of their sales in the United States increasingly have large dollar cost bases too.

Among industrials, Siemens generated 20% of its top line in the United States in the 12 months to end-Sept., making the country its largest market by revenues.

However, the Munich-based conglomerate employs 16% of its workforce in the United States and has a number of other dollar-based costs, such as raw materials and components.

"Most European industrials used to have a much more export-heavy business model 10 years ago, but many of them by now have an almost complete match," with high dollar costs swallowing up a large portion of the benefits of a weak euro, said Andreas Willi, head of European capital goods research at JPMorgan.

Among other firms in the same boat, France's Dassault has 36% of its sales and 40% of its operating expenses in dollars. The recent rise in the greenback will have a neutral impact on the group's quarterly operating margin, according to WestLB estimates.

Global Growth

Boasting the highest net revenue exposure to the dollar in the automotive sector, German auto groups Daimler and BMW should be key beneficiaries of a weak euro if consumer demand holds, Deutsche Bank autos analyst Jochen Gehrke said.

"But how high are the chances of demand not weakening and the euro staying where it is now?," Gehrke wondered.

The euro zone's economy barely grew in the third quarter, with collapsing business confidence and slowing industry pointing to a recession in the coming months.

If the euro bloc slips into protracted contraction, the impact on global growth would more than offset any beneficial currency effect on exporters' profitability.

Corporate earnings among European exporters declined along with demand when the euro dropped to 1.23 versus the dollar during the 2008 recession.

Beneficiaries

Nevertheless, some stocks should still do well from a weak euro.

Pharmaceutical stocks and consumer-related sectors historically showed the greatest share price sensitivity to dollar appreciation versus the euro, along with some aerospace and defense names, according to SocGen data.

"This share price behavior has to do with the fact that some companies are perceived as more protected in a weak euro environment," SocGen's Panseri, said.

Exporters of luxury goods and other discretionary items benefit from the exposure to a healthier economy in the United States when macro conditions on this side of the Atlantic are depressed.

As for pharma stocks and consumer staples retailers, their defensive profile helps them outperform in tandem with the safe-haven dollar at times of economic uncertainty in the euro zone.

Ahold, a Dutch grocer that generates around 60% of its sales in the United States, would be a likely winner in this scenario, Anthony Sleeman, sector analyst at Bernstein Research, said.

Other winners include aerospace and defense conglomerate EADS.

"Given the size of its order book and that airplanes are priced in dollars but produced predominantly on a euro basis, EADS should be a great winner if the euro continues to fall," Howard Wheeldon, senior strategist at BGC Partners, said.

Shares in EADS rose around 38% in 2011, when it notched up record results at its jets business. Brokers see further upside, with 20 out of 29 analysts rating the stock "strong buy" or "buy," Thomson Reuters StarMine data showed.