Energy profits lift Europe earnings outlook

July 2 (Reuters) - A jump in energy company profits is set to drive European blue-chip earnings growth in the second quarter, overshadowing far weaker gains across the rest of the market, forecasts showed on Thursday.

Companies in the STOXX 600 are expected to post average earnings growth of 14.5% in the quarter, according to London Stock Exchange Group IBES data. Excluding the energy sector, profit growth is seen at 5.5%, showing how heavily the region's earnings outlook depends on oil and gas groups.

• Revenues of non-energy companies are forecast to increase by 5.1% on average, the I/B/E/S data showed.

• Energy is forecast to lead sector earnings growth at 109.3%, followed by basic materials at 46.3%, technology at 14% and consumer cyclicals at 11.5%.

• The upbeat outlook followed a volatile second quarter, with Brent surging above $100 a barrel on Iran war supply fears before retreating to around $70.

• The STOXX 600 index lost most of its 2026 gains soon after the outbreak of the war but has since recovered and is now up about 9% year-to-date.

• The index has already met J.P. Morgan's year-end target, prompting the brokerage to raise its 2026 full-year estimate on Monday.

• Although the U.S. and Iran signed an interim agreement to halt the war in June, some uncertainty lingers as peace talks struggle to make headway.

• Jefferies economist Mohit Kumar said on Monday the U.S. and Iran would likely reach a deal, but it would be a "patch" rather than a long-term solution.

(Reporting by Rafal Nowak and Javi West Larrañaga in Gdansk; Editing by Matt Scuffham)