Published by Global Banking & Finance Review®
Posted on October 7, 2025
2 min readLast updated: January 21, 2026
Add as preferred source on GoogleEuropean corporate earnings are forecasted to decline due to Trump's tariffs, with a 0.2% drop expected in Q3. Revenue estimates for STOXX 600 also fall.
By Javi West Larrañaga and Marleen Kaesebier
(Reuters) -European corporate earnings are set to shrink in the third quarter, the latest forecasts showed on Tuesday, as companies feel the impact of U.S. President Donald Trump's trade tariffs.
European companies are expected to report a drop of 0.2% in third-quarter earnings, on average, according to LSEG I/B/E/S data, below the 0.6% fall analysts expected a week ago.
That would be the worst quarterly performance since the first quarter of 2024.
The forecast contrasts starkly with the 12.5% earnings growth expected for the third quarter before U.S. President Donald Trump announced plans for a wide array of tariffs in February.
REVENUE ESTIMATES FALL
Revenue estimates for Europe-wide STOXX 600 companies have also taken a hit and are now expected to shrink 0.3% compared to last year, according to the data.
A year ago, STOXX 600 companies delivered on average a 7.8% increase in third-quarter earnings and a 1.1% drop in revenues. In the second quarter of 2025, earnings increased 4.0% year-on-year.
This earnings season could show how European companies are navigating a rocky trade environment and whether they will benefit from increased clarity since a U.S.-EU framework deal in July.
Shares in France's SEB and Britain's Aston Martin plunged on Monday after the former cut its profit forecast and the latter warned of a bigger-than-expected annual loss as a result of lower demand and U.S. tariffs.
According to the report, the real estate sector is expected to see the highest earnings growth rate at 5.6%, while utilities have the lowest earnings growth rate expected of any sector with a 5.6% fall.
Euro zone earnings have disappointed this year, but they are set to improve in 2026 on the back of a number of catalysts, J.P. Morgan analysts said in a note on Monday, upgrading the single currency area to "overweight" from "neutral".
(Reporting by Javi West Larrañaga and Marleen Kaesebier. Editing by Mark Potter, Alexandra Hudson)
The STOXX 600 is a stock index that represents 600 of the largest companies across 17 European countries. It is used as a benchmark for the European equity market.
Revenue estimation is the process of predicting a company's future sales based on historical data, market trends, and economic conditions. It helps businesses plan and allocate resources effectively.
Earnings growth refers to the increase in a company's net profit over a specific period, typically measured year-over-year. It is an important metric for assessing a company's performance.
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