August 6, 2019 / 3:43 PM / 4 months ago

European earnings seen falling in second and third quarters: Refinitiv

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, August 6, 2019. REUTERS/Staff

LONDON (Reuters) - Companies listed on the pan-European STOXX 600 index are expected to report a drop in earnings in the second and third quarters of 2019, according to data from I/B/E/S Refinitiv, marking a severe deterioration in outlook for corporate Europe.

Earnings in the second quarter are now seen falling as much as 2.7%, which would be the worst quarterly performance for the region since the third quarter of 2016 and is a big reversal from a rise seen a week ago. Revenue for the period is seen rising by 2.8%.

If it happens, that would be the first back-to-back quarterly earnings decline since the second and third quarters of 2016, representing an earnings recession. Earnings dropped 2% last quarter.

According to the latest weekly data compiled by Refinitiv, the downturn would last into the third quarter too, with consensus now pegged at a 0.7% drop on flat revenue compared with expectations for growth last week.

The lower forecasts will underscore concerns about the corporate health of Europe Inc as results season continues and investors look ahead to H2 amid a raft of weak macroeconomic data for the region.

Out of the 192 companies that have reported so far, 50.5% have exceeded analysts’ expectations, which is broadly inline with a typical quarter, the report said.


Reporting by Josephine Mason; Editing by Thyagaraju Adinarayan

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