Europe's second quarter earnings season is a fifth of the way through, and things are not looking too good: half the companies have missed analysts' forecasts and earnings are down 10 percent versus last year, Thomson Reuters Starmine data shows.
Among the large and mid-caps which have already reported results, 51 percent have missed expectations on earnings, with the worst showings from telecoms, materials and industrials.
The lacklustre reporting season, speckled with cautious outlooks, is taking its toll on future expectations too.
"Sell-side analysts have downgraded estimates almost across the board, with the IT space hit hardest by cuts of more than 5 percent in a little over three weeks, suggesting the outlook is less than rosy," Barclays' strategists note.
"As always, FY2 cuts (2013) have been less severe than FY1 ones, with growth estimates at an average of 13.2 percent contrasting starkly with this year's average figure of 0.4 percent, so expect further downgrades to come early next year."
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