July 22, 2020 / 6:56 AM / 21 days ago

Expectations worsen for Europe's second-quarter earnings season

LONDON (Reuters) - Expectations for second-quarter corporate profits have deteriorated in Europe, according to Refinitiv data, as fears grow over the extent of the recession triggered by the coronavirus pandemic.

Companies listed on the pan-European STOXX 600 are now expected to report a decline of 58.6% in second-quarter earnings, versus 56.2% forecast the week before.

Many investors, however, believe there is a big margin for error in second-quarter estimates, given analysts in many cases had no precise outlook to factor into their estimates.

The Refinitiv consensus points to earnings quickly starting to grow from the first quarter of 2021 by 35.8% and by 83% for the second, partly due to the weak results posted a year before.

Reporting by Julien Ponthus; Editing by Himani Sarkar

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