Finance
European corporate outlook improves, but earnings forecast to fall
Published by Global Banking & Finance Review®
Posted on February 12, 2026
2 min readLast updated: February 12, 2026
Quick Summary
European corporate earnings outlook improves with a 1.1% drop forecasted, better than previous estimates. Key companies report strong results.
European Corporate Earnings Outlook Improves Despite Expected Decline
European Corporate Earnings Outlook
By Javi West Larrañaga
Earnings Performance Analysis
Feb 12 (Reuters) - The outlook for European corporate health has improved, the latest LSEG I/B/E/S forecasts showed on Thursday, as European blue-chip indices hit highs on the back of a better-than-anticipated earnings season so far.
Revenue Expectations
European companies are expected to report a 1.1% drop in 2025 fourth-quarter earnings, on average, according to LSEG data, a substantial improvement from the 3.1% decrease analysts expected a week ago.
Key Company Performances
That would be still be the worst earnings performance in the past seven quarters, based on the LSEG data.
OUTLOOK REBOUNDS
Market forecasts for fourth-quarter earnings sharply deteriorated after U.S. President Donald Trump announced plans for a wide array of tariffs on trading partners in February last year.
Expectations for STOXX 600 company earnings worsened from around 11% growth expected before the announcement to a contraction of as much as 4.2% estimated in January.
Despite that, forecasts have slightly rebounded in past weeks, as 60% of companies have posted better-than-expected results so far this season. In a typical quarter, 54% beat analyst estimates, according to LSEG data.
The outlook for revenue, however, deteriorated, and revenues of STOXX 600 companies are now expected to be 3.4% lower than in the same period last year, compared to a forecast of a 3.2% decrease last week.
Better-than-expected results of luxury group Hermes and Ray-Ban maker EssilorLuxottica coupled with positive guidance for 2026 from the world's largest brewer Anheuser-Busch Inbev and Siemens were helping sentiment in Europe.
(Reporting by Javi West Larrañaga; Editing by Matt Scuffham)
Key Takeaways
- •European corporate earnings outlook shows improvement.
- •Fourth-quarter earnings expected to drop by 1.1%.
- •60% of companies beat earnings expectations this season.
- •Revenue forecasts for STOXX 600 companies have worsened.
- •Positive results from Hermes, EssilorLuxottica, and others boost sentiment.
Frequently Asked Questions about European corporate outlook improves, but earnings forecast to fall
1What is revenue?
Revenue is the total income generated by a company from its business activities, typically from sales of goods and services before any expenses are deducted.
2What is the STOXX 600?
The STOXX 600 is a stock index that represents 600 of the largest companies across 17 European countries, providing a broad view of the European equity market.
3What is earnings season?
Earnings season is the period during which publicly traded companies report their quarterly financial results, including earnings and revenue figures.
4What is market sentiment?
Market sentiment refers to the overall attitude of investors toward a particular security or financial market, often influenced by news, reports, and economic indicators.
