By Marleen Kaesebier
(Reuters) -The outlook for European corporate health has improved, the latest earnings forecasts showed on Tuesday.
European companies are expected to report a rise of 1.9% in first-quarter earnings, on average, according to LSEG I/B/E/S data, better than the 0.4% rise analysts expected a week ago.
The improvement comes after 59.6% of the 230 STOXX 600 companies that have already reported first-quarter earnings exceeded analysts’ expectations.
At the time of U.S. President Donald Trump’s inauguration in January, the forecasts were for a 3.5% increase in first-quarter earnings, according to LSEG data, but that reversed to expectations for a drop of as much as 3.5% following Trump’s April tariff announcements.
Global stocks rallied after news at the weekend of a temporary 90-day tariff de-escalation between the U.S. and China in their ongoing trade war.
Consensus forecasts for first-quarter revenues have also jumped from last week, with a 2.3% increase now expected compared with an increase of 1.9% expected last week.
This compares with a drop of 3.3% in earnings and a drop of 4.6% in revenues a year ago, the data showed.
European companies reporting first-quarter earnings this week have included Poland’s biggest bank PKO BP, which posted a 20.8% year-on-year rise in net profit, and Germany’s Bayer, which reported a smaller decline in adjusted earnings than investors had feared.
Of the countries represented on the STOXX 600 index, Poland and Denmark have the highest estimated earnings growth rates, at 36.8% and 18.9% respectively, while Finland and Portugal have the lowest, according to the LSEG I/B/E/S report.
The Europe-wide index has risen around 7% so far this year.
Results from companies including German utility E.ON, luxury goods group Richemont and French energy firm Engie are due later this week.
(Reporting by Marleen Kaesebier. Editing by Mark Potter)
