Corporate America is once again entering earnings season. This time around, the key question facing many companies is how much earnings will be affected by the rising U.S. dollar. Over the past year, the dollar's value rose dramatically against other currencies including the euro, which is a big problem for large multinational companies as the strengthening dollar makes international sales worth less when that revenue is converted back into the domestic currency. It's also a difficult comparison period, since earnings last year were not significantly affected by currency.

Procter & Gamble Co. (PG 0.54%) knows this situation can be a significant headache. As a global consumer staples conglomerate, P&G is a case study for the double-edged sword that is a strong U.S. dollar. P&G is set to report third-quarter earnings April 23. Here's what investors need to know.

P&G leadership brands. Source: Company website.

Earnings under severe pressure
Judging from P&G's recent results, the company clearly faces a significant headwind. Last quarter, P&G net sales declined by 4%, due entirely to a 5-percentage-point negative impact from currency movements. At the same time, diluted earnings from continuing operations fell 9% year over year. P&G doesn't expect this headwind to ease anytime soon: Management has warned investors that currency effects will reduce after-tax earnings by $1.4 billion this year.

This is due to P&G's high degree of exposure to the international markets. Indeed, 61% of P&G's sales in fiscal 2014 were generated outside of North America. As a result, there is a clear precedent for revenue and earnings to fall once again on a year-over-year basis when P&G reports earnings this time around.

Still, analyst estimates for the quarter seem relatively optimistic, perhaps overly so. According to Thomson Financial, the median estimate calls for P&G to earn $0.93 per share in the quarter. In the same quarter last year, P&G earned $0.90 per share. Analysts on average expect P&G to grow earnings by 3%, which might be difficult to do given the strengthening U.S. dollar.

However, currency isn't the only issue holding P&G back. Even when stripping out currency effects to focus on the core company, the results aren't haven't been that great. Last quarter, P&G's organic volumes were flat. This signals weak product demand in the underlying business.

P&G remains a dividend play, but growth is a concern
P&G remains a great dividend stock. P&G is a Dividend Aristocrat, and its 3% dividend yield is one of the highest in the Dow Jones Industrial Average. It has paid dividends for 124 consecutive years, dating all the way to the company's incorporation in 1890. And even with the company's struggles in recent quarters, P&G's earnings payout ratio remains a comfortable 75%. Clearly, income investors can still count on P&G's payout.

However, P&G faces real growth challenges. Revenue and earnings are likely to decline again in the latest earnings report, as they did over the first two quarters of the current fiscal year. And it's not as if P&G stock offers much room for error: Shares of the consumer staples giant trade for a relatively lofty 25 times earnings, which is well ahead of the overall market multiple of roughly 20.

While there's no questioning P&G's dividend, investors should brace themselves for another round of weak earnings numbers when the company reports next week.