Published by Global Banking & Finance Review®
Posted on January 15, 2026
2 min readLast updated: January 19, 2026
European corporates anticipate a 4.1% earnings decline in Q4 2025, the worst in seven quarters, amid geopolitical uncertainties and US tariff concerns.
Jan 15 (Reuters) - European corporate earnings are set to decline in the fourth quarter, the latest forecasts showed on Thursday, as geopolitical uncertainty mounts and the market awaits a decision from the U.S. Supreme Court on the legality of President Donald Trump's tariffs.
European firms are expected to report a 4.1% drop in 2025 fourth-quarter earnings, on average, according to LSEG I/B/E/S data, worse than the 3.9% decrease analysts expected a week ago.
That would be the worst earnings performance in the past seven quarters.
WHY IT MATTERS
As Europe reels from sluggish growth prospects and a more uncertain trade environment, the Supreme Court's ruling could have far-reaching consequences for the global economy if it overturns a wide array of tariffs imposed by U.S. President Donald Trump.
Though European investors seem negative towards the upcoming results season, they have pushed bourses to records, with the FTSE , DAX and STOXX indexes recently hitting their highest levels ever.
Revenues are also expected to shrink 2.9% compared to last year, according to the LSEG data. That is worse than the 2.6% fall expected last week.
CONTEXT
Meanwhile, earnings of U.S. companies are forecast to significantly outperform European ones with S&P 500 companies expected to deliver 8.8% average earnings growth, according to a different LSEG I/B/E/S report published on Friday.
Early forecasts are not always good predictors of the end result. For months, investors expected unremarkable or even negative growth for 2025’s third-quarter results, but STOXX 600 companies ended up delivering 7.3% year-on-year earnings growth in the quarter.
(Reporting by Javi West Larrañaga; Editing by Matt Scuffham)
The U.S. Supreme Court's ruling on tariffs can significantly impact international trade policies, affecting how countries impose tariffs and their economic relations with one another.
The STOXX index is a stock market index that represents the performance of large companies in Europe. It is commonly used as a benchmark for European equities.
Revenue shrinkage refers to a decrease in a company's sales or income over a specific period. It can indicate declining demand or increased competition in the market.
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