The outlook for European corporate health has slightly worsened, according to forecasts released on Thursday, as relief from US tariffs is outweighed by ongoing geopolitical tensions straining traditional Western alliances, reports Reuters.
European firms are expected to report a 4.2 per cent drop in 2025 fourth-quarter earnings, on average, according to LSEG I/B/E/S data, slightly worse than the 4.1 per cent decrease analysts expected a week ago.
That would be the worst earnings performance in the past seven quarters.
US president Donald Trump ruled out on Wednesday seizing Greenland by force and said he would not be imposing 10 per cent tariffs on eight European allies after reaching a framework agreement regarding the Arctic island.
Although the details are unclear, the news pushed European stocks higher, with the STOXX 600 index rising around 1 per cent as the current earnings season gathers steam.
Still, analysts and investors cautioned against complacency, warning of the Trump administration's unpredictable approach to foreign policy.
The outlook for revenues also took a hit and are now expected to shrink 3.5 per cent compared to last year, according to the LSEG data. That is worse than the 2.9 per cent fall expected last week.
European corporate outlook dims slightly, still marred by global uncertainty
FE Team | Published: January 22, 2026 23:31:51
European corporate outlook dims slightly, still marred by global uncertainty
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