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Energy profits drive European earnings to highest level in three years

Energy profits drive European earnings to highest level in three years
Energy profits drive European earnings to highest level in three years

According to LSEG's forecasts, published Thursday to coincide with the start of reporting season, a surge in energy sector profits will help European blue-chip companies to post their highest earnings growth in more than three years.

LSEG IBES data predicts that companies in Europe's benchmark STOXX 600 index will report earnings growth of 16.7% during the second quarter. This is based on?results from 28 companies, and market estimates for those whose results are not yet in.

The rate of growth excluding energy companies is a modest 6.4%. The European energy'majors' are reportedly?posting profits that are more than 125% greater year-on-year. This is due to higher oil and natural gas prices after disruptions in shipping through the Strait of Hormuz.

Revenue is expected increase by 11.1% annually, compared to the previous estimate of 10.5% a week ago.

ASML, the most valuable company in Europe, helped boost sentiment on Wednesday after it reported earnings that exceeded expectations and raised its 2026 sales forecast.

The week of July 20 is expected to see 52 companies report their quarterly earnings. This includes Swiss drugmaker Novartis, Italian bank UniCredit and German software giant SAP.

(source: Reuters)