LONDON (Reuters) - European companies will report a bigger drop in earnings in the second and third quarters than previously expected, according to the latest data on Tuesday, as the region’s corporate health continues to deteriorate amid a slowdown in manufacturing.
Companies listed on the pan-European STOXX 600 index are expected report a drop in EPS of as much as 2.6%, which would be the worst quarterly performance for the region since Q3 2016, according to the latest data from I/B/E/S Refinitiv.
That also marks a second straight quarter of decline, representing a corporate recession for the region. The latest forecast compares with a drop of 1.6% expected in the weekly consensus released last Tuesday.
Revenue for the period is seen rising by 3.1%, up from 3% last week.
The contraction in third quarter earnings is also seen worsening - consensus now calls for a drop of 1.8% compared with a 1% decline last week.
Some 255 companies out of the 600 listed on the index have reported their Q2 earnings so far. Just under half have exceeded analysts’ expectations.
(GRAPHIC: Earnings growth expectations - here)
Reporting by Josephine Mason