The outlook for euro zone companies’ earnings is starting to deteriorate again, reversing an improving trend that had started in late 2011, according to data from Thomson Reuters Datastream, as, with the region on the edge of recession, analysts cut their corporate earnings forecasts.
Data shows earnings momentum - analysts’ upgrades minus downgrades as a percentage of total estimates - is now falling in all big euro zone countries including Germany, France, Italy and Spain, data shows.
German companies’ earnings momentum, which had turned slightly positive in mid-April, is now receding again, at 0.6 percent, while France’s earnings momentum is at -2.7 percent and Italy’s momentum is at -4 percent.
Spain’s earnings momentum, which had started to decouple with other euro zone economies back in February when the country’s debt crisis resurfaced, is at -12.6 percent, its worst earnings momentum since the heat of the financial crisis in early 2009.
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