European Earnings Outlook Darkens With 0.7% Q2 Decline Predicted

Analysts now expect European listed companies to record a 0.7% year-on-year drop in second-quarter earnings, a steeper decline than the 0.2% fall forecast just a week ago. The revenue outlook is unchanged, with sales projected to contract 3.0% for the quarter. In the United States, earnings momentum is also moderating. Consensus estimates put S&P 500 profit growth for the June quarter at 4.8%, well below the 13.3% expansion logged in the first quarter. Information technology and communication-services groups are still expected to provide the bulk of the gains. Of the 28 S&P 500 constituents that have reported so far, 77% have exceeded earnings-per-share forecasts and 80% have topped sales expectations. Early U.S. results have been buoyed in part by comparisons with estimates trimmed ahead of the April start of the 145% tariff on Chinese goods, but the remainder of the reporting season will be measured against forecasts made after the levy took effect.