European fourth-quarter corporate profits expected to fall 3.9%

The outlook for STOXX 600 companies is in stark contrast to that of ⁠U.S. listed ‌companies, with earnings of S&P 500 firms forecast to grow 9.2%, according to a separate LSEG report published ⁠on Friday.

The outlook for European corporate health has slightly improved, the latest forecasts showed on Thursday, ‌as trade tensions take a backseat and investors focus on the dollar's weakness and the earnings ⁠season. European firms are expected to report a 3.9% drop in 2025 fourth-quarter earnings, on average, according to LSEG I/B/E/S data, slightly better than ‌the 4.2% decrease ​analysts expected a week ago.

Revenues are also forecast to fall, with ‍analysts anticipating a 3.5% decrease, unchanged from last week's estimate, the LSEG report showed. WHY IT MATTERS

Projections for STOXX 600 company results have steadily deteriorated after a year of ⁠trade ‌upheaval since U.S. President ⁠Donald Trump took office. Fourth-quarter earnings of European blue-chips were forecast to grow as ‍much as 11.1% year-on-year in February, right before Trump announced plans for a ​wide array of tariffs.

They are now expected to deliver the ⁠worst year-on-year change in the past seven quarters. CONTEXT

This earnings season could show how European ⁠businesses are navigating the tough trade disruption, with leaders and policymakers worried that the strengthening of the euro is making domestic exporters less ⁠competitive. The outlook for STOXX 600 companies is in stark contrast to that of ⁠U.S. listed ‌companies, with earnings of S&P 500 firms forecast to grow 9.2%, according to a separate LSEG report published ⁠on Friday.

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