Published by Global Banking & Finance Review®
Posted on February 5, 2026
2 min readLast updated: February 5, 2026
Add as preferred source on GoogleEuropean corporate earnings outlook improves, with 73.1% of STOXX 600 companies beating estimates despite expected declines.
By Javi West Larrañaga
Feb 5 (Reuters) - The outlook for European corporate health has improved, the latest forecasts, based on LSEG I/B/E/S data, showed on Thursday, even as investors assessed a mixed bag of earnings in Europe and as world stocks extended a losing streak.
European companies are expected to report a 3.1% drop in 2025 fourth-quarter earnings, on average, according to LSEG I/B/E/S data, slightly better than the 3.9% decrease analysts expected a week ago.
That would still be the worst earnings performance in the past seven quarters, based on the LSEG data.
WHY IT MATTERS
Even with the gloomy outlook, out of the 52 companies in the STOXX 600 index that have reported to date, 73.1% reported results exceeding analyst estimates, the data showed, whereas in a typical quarter 54% beat analyst estimates.
The results were dominated this week by a tech stocks rout and Novo Nordisk's plunge on Wednesday, which wiped $50 billion off the weight-loss drugmaker's market capitalisation after it warned its sales and profits would fall in 2026.
CONTEXT
Results next week from Ray-Ban-maker EssilorLuxottica, luxury group Hermes and beauty conglomerate L'Oreal could shed some light on how consumer- oriented European exporters are dealing with the current trade situation.
The outlook for revenues at STOXX 600 companies has also improved and they are now expected to fall by 3.2% compared with the same quarter last year, a slightly smaller drop than last week's expectation of a 3.5% slump, the LSEG report showed.
(Reporting by Javi West Larrañaga; Editing by Jane Merriman)
Corporate earnings refer to the profits a company generates during a specific period, typically reported quarterly or annually. It reflects the company's financial performance and is a key indicator for investors.
The STOXX 600 index is a stock index that represents 600 of the largest companies across 17 European countries. It serves as a benchmark for the performance of European equities.
A mixed bag of earnings refers to a situation where some companies report strong earnings while others report weak or disappointing results, leading to varied overall performance in the market.
Beating analyst estimates indicates that a company's performance exceeded market expectations, which can positively influence its stock price and investor confidence.
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