European corporates expected to deliver worst earnings growth in past seven quarters

Core Viewpoint - European corporate earnings are projected to decline by 4.1% in the fourth quarter of 2025, marking the worst performance in the past seven quarters, amid geopolitical uncertainties and anticipation of a U.S. Supreme Court ruling on tariffs [1][2]. Earnings Performance - European firms are expected to report a 4.1% drop in fourth-quarter earnings, worse than the previously anticipated 3.9% decrease [1]. - Revenues are forecasted to shrink by 2.9% compared to the previous year, also worse than the earlier expectation of a 2.6% decline [4]. Market Context - Despite negative sentiment towards the upcoming earnings season, European stock indices such as the FTSE, DAX, and STOXX have recently reached record highs [3]. - In contrast, U.S. companies are expected to show significant earnings growth, with S&P 500 firms projected to achieve an average growth of 8.8% [5].