April 29, 2020 / 6:14 AM / a month ago

Expectations for European corporate profits fall further

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, April 27, 2020. REUTERS/Staff

LONDON (Reuters) - Europe Inc’s profit expectations for the second and third quarters continued to deteriorate sharply, Refinitiv data showed on Wednesday, as fears about the scale of the recession triggered by the coronavirus pandemic continue to grow.

Companies listed on the pan-European STOXX 600 are now expected to report a 40.4% decline in earnings in the second quarter, down from a 37% drop forecast the week before.

For the third quarter, analyst expectations are now set for a 29.1% fall in earnings versus 27.6% a week ago.

While many governments in Europe have announced strategies to gradually ease lockdowns implemented to fight the epidemic, there is currently little hope the economy will bounce back, let alone return to normal, before the first quarters of 2021.

Before the virus outbreak, analysts were expecting Europe to end its corporate recession, which lasted throughout 2019, but those hopes have since been quashed.

Reporting by Julien Ponthus; Editing by Catherine Evans

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