European STOXX 600 companies are projected to post a 23.6% jump in third-quarter earnings, supported by a 13.6% rise in revenue that represents the best top-line showing since 2022. The energy industry is serving as the primary growth engine, with profits expected to surge 139% amid record refining margins and conflict-driven price increases. However, the corporate landscape remains fractured as real estate, automotive manufacturers, and retail firms face declining profits.
Key points
Overall European profit momentum is largely concentrated in energy and defence, helping l…: Overall European profit momentum is largely concentrated in energy and defence, helping lift the STOXX 600 to its highest mark in over a month.
Profit growth remains broad-based at the macro level, with eight out of 10 corporate sect…: Profit growth remains broad-based at the macro level, with eight out of 10 corporate sectors anticipating quarterly earnings expansions.
Investors face a highly fragmented corporate outlook as consumer cyclicals and real estat…: Investors face a highly fragmented corporate outlook as consumer cyclicals and real estate companies struggle with declining profits.
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Companies listed on Europe's benchmark STOXX 600 index are expected to report average earnings growth of 23.6% in the third quarter compared with the same period last year. The estimate is based on results from 144 companies that have reported so far and market forecasts for those yet to announce their financial performance.
The projected growth is marginally below the 23.9% increase recorded in the previous quarter, highlighting the resilience of corporate earnings despite an uncertain global economic environment.
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Energy Sector Drives Earnings Growth
The energy sector has emerged as the biggest contributor to the strong earnings performance. According to the LSEG report cited by Reuters, energy companies are expected to post a 139% jump in third-quarter profits from a year earlier, benefiting from higher energy prices linked to the Iran war and record refining margins.
However, earnings growth across the broader European corporate landscape also remains encouraging when the energy sector is excluded.
Companies outside the energy sector are expected to report aggregate…
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