European Earnings Dip: Worst Quarter in Two Years for Blue-Chip Giants

European blue-chip companies are facing their worst earnings season in two years, with a sharper decline in revenues anticipated. Despite challenges, approximately 56% of companies have exceeded market estimates. However, U.S. blue-chips are outperforming their European counterparts, showcasing a 14% growth in earnings.

European blue-chip companies are enduring their most challenging earnings season in two years, according to the latest LSEG I/B/E/S data released on Thursday. Analysts had previously predicted a slight 0.1% decline, but now forecast a 0.4% drop in year-on-year earnings for the fourth quarter of 2025.

The outlook for revenues has suffered significantly, with a projected year-on-year decline of 4.2%, up from last week's 2% figure. Despite these challenges, over half of the companies that have reported earnings have surpassed market expectations.

Meanwhile, U.S. counterparts are performing robustly, with S&P 500 earnings growth topping 14%. Deutsche Bank analysts predict European earnings may rebound in the year's second half, gradually closing the gap on U.S. growth.