European earnings expectations strengthened as of October 23, 2026, with LSEG forecasting third-quarter profit growth of 21.9% for STOXX 600 companies, up from 20.7% a week earlier. Energy companies account for much of the expected increase, leaving a more restrained outlook for the rest of the market.
Key Takeaways
- The third-quarter earnings growth forecast rose by 1.2 percentage points in a week.
- Energy profit growth is expected to far outpace the increase across other sectors.
- The forecast combines results from 47 companies with estimates for those yet to report.
Table of Contents
- European earnings forecast strengthens for Q3
- Energy drives an uneven profit recovery
- Stronger forecasts meet higher costs
- Conclusion
European earnings forecast strengthens for Q3
The latest projection would mark the second-strongest quarterly earnings growth rate in four years if realized. It remains an estimate for the reporting season rather than a completed tally of corporate results.
The STOXX Europe 600 benchmark covers 600 companies across 17 countries and 11 industries in Europe’s developed economies. Its broad coverage makes the difference between overall earnings growth and growth excluding energy important when assessing how widely the improvement extends.
| Item | Details |
|---|---|
| Energy-sector earnings | Forecast to rise 134.1% year over year in Q3 2026. |
| Earnings excluding energy | Forecast to rise 8.4% year over year in Q3 2026. |
| Revenue | Forecast to rise 13.3% year over year in Q3 2026. |
Energy drives an uneven profit recovery
Energy companies are expected to deliver by far the sharpest profit increase. Volatility and disruptions linked to the US-Iran war have created opportunities for energy trading desks, supporting expectations for the sector’s quarterly performance.
Excluding energy, projected profit growth is much lower. The contrast means the headline improvement should not be read as an equally strong acceleration across European businesses.
The revenue outlook has also strengthened. If the projected sales increase is realized, it would be the strongest since the third quarter of 2022.
Stronger forecasts meet higher costs
The earnings upgrade comes alongside elevated oil prices and rising government borrowing costs. Those pressures complicate the backdrop for European companies even as near-term profit expectations improve.
The distinction is particularly relevant outside energy: higher energy prices can support producers and trading operations while increasing costs for other businesses. The earnings estimates do not establish how those competing effects will influence subsequent quarters.
Conclusion
European earnings expectations have improved, but the strength is concentrated in energy. Results from companies still to report will show whether the projected growth materializes, while their guidance will help clarify the effect of energy and financing costs beyond the third quarter.
Read More News
Disclaimer
This FinanceVelix article provides general information, not personalized financial, investment, legal, or tax advice. Market prices, interest rates and economic conditions can change; investments carry a risk of loss. Facts reflect the material available when published and may change. Check important information independently and consult a qualified professional when needed. Mentioning an asset, company, or service is not an endorsement.
