European Q1 Corporate Profits Expected to Grow in 2023
By Javi West Larrañaga, Marleen Kaesebier
(Reuters) -European companies are expected to report growth of 0.4% in first-quarter earnings, according to LSEG I/B/E/S data released on Tuesday, compared to the 1.7% drop analysts had expected a week ago.
The improvement comes after 58.4% of the 149 STOXX 600 companies that have already reported first-quarter earnings exceeded analysts' expectations.
At the time of U.S. President Donald Trump's inauguration in January, the forecasts were for a 3.5% increase in first-quarter earnings, according to LSEG data, but that reversed to expectations for a drop of as much as 3.5% following Trump's April tariff announcements.
Consensus for revenue also slightly improved, with analysts expecting a 1.9% increase, compared with a 1.4% rise expected last week.
That compares to a drop of 3.3% in earnings and a drop of 4.6% in revenues a year earlier, the data showed.
Investors are welcoming the prospect the trade war may ease after China's announcement that it was "evaluating" a U.S. offer to discuss tariffs last week.
However, companies, such as German car parts maker Continental, warned that increasing U.S. trade restrictions from higher tariffs pose economic risks.
According to the LSEG report, seven of the ten sectors in the index expect to see an improvement in earnings compared to the year prior.
The real estate sector stands out with the highest earnings growth rate of 22.8% for the quarter, while energy has the weakest anticipated growth with an expected 28.2% decrease.
Companies continue to publish their results, with weight loss drug maker Novo Nordisk set to report first quarter earnings on Wednesday, with a 19.7% increase in revenue expected, compared to a year ago, according to LSEG data.
(Reporting by Marleen Kaesebier and Javi West Larrañaga in Gdansk, editing by Milla Nissi-Prussak; Editing by Sharon Singleton)
