European first-quarter corporate profits seen falling 1.7% as trade war tensions abate

(Reuters) -The outlook for European corporate health has improved, the latest earnings forecasts showed on Tuesday, amid optimism over potential U.S. trading deals with key partners, especially China.

European companies are expected to report a drop of 1.7% in first-quarter earnings, according to LSEG I/B/E/S data, better than the 3.5% drop analysts had expected a week ago.

Consensus for revenue remained unchanged from last week, with analysts expecting an increase of 1.4%.

This compares with a drop of 3.3% in earnings and a drop of 4.6% in revenues a year ago, the data showed.

(Reporting by Javi West Larrañaga and Marleen Kaesebier; Editing by Emelia Sithole-Matarise and Mark Porter)