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European Second-Quarter Corporate Profit Outlook Dips
Published by Global Banking & Finance Review®
Posted on August 19, 2025
2 min readLast updated: January 22, 2026
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European corporate profit outlook for Q2 declines with earnings growth at 4.6% and revenue forecasts worsening. Market sentiment improves post EU-US deal.
European second-quarter corporate profit outlook dips
Overview of European Corporate Profit Outlook
(Reuters) -The outlook for European corporate health has slightly deteriorated, the latest earnings forecasts showed on Tuesday, marking a change of direction after several weeks of improvement.
Earnings Growth Expectations
European companies are expected to report growth of 4.6% in second-quarter earnings, on average, according to LSEG I/B/E/S data. That is slightly below the 4.8% rise analysts had expected a week ago.
Since the European Union struck a framework deal with the United States in July and the U.S. and China extended their tariff truce for another 90 days last week, market sentiment has been steadily improving.
Before July, forecasts for Europe-wide STOXX 600 company earnings had steadily worsened since U.S. President Donald Trump announced plans for "reciprocal" tariffs in February. Analysts had expected second-quarter earnings to grow 9.1% year-on-year right before the announcement, according to the data.
Revenue Forecast Trends
The consensus for revenue also continued to worsen slightly, the LSEG report showed. Analysts now expecting a 1.5% fall, compared with a 1.3% drop expected last week.
That compares with a 3.0% increase in earnings and a 0.8% drop in revenues a year ago.
(Reporting by Marleen Kaesebier and Javi West Larrañaga)
Key Takeaways
- •European corporate profit outlook has slightly worsened.
- •Earnings growth expectations for Q2 are at 4.6%.
- •Revenue forecasts show a 1.5% decline.
- •Market sentiment improved after EU-US framework deal.
- •Tariff truce between US and China influences forecasts.
Frequently Asked Questions about European second-quarter corporate profit outlook dips
1What is earnings growth?
Earnings growth is the increase in a company's net income over a specific period, typically expressed as a percentage. It indicates how well a company is performing financially compared to previous periods.
2What is market sentiment?
Market sentiment refers to the overall attitude of investors toward a particular security or financial market. It is influenced by news, economic indicators, and market trends, affecting buying and selling decisions.
3What is the STOXX 600 index?
The STOXX 600 index is a stock market index that represents 600 of the largest companies across 17 European countries. It is used as a benchmark for the performance of European equities.
