European earnings growth seen strongest in 3 years as energy profits surge

By Mirko Miorelli

July 16, (Reuters) - A surge in energy-sector profits is set to help European blue-chip companies post their strongest earnings growth in more than three years, according to LSEG forecasts published on Thursday as the reporting season gets underway.

Companies in Europe's benchmark index STOXX 600 are forecast to report earnings growth of 16.7% in the second quarter, according to LSEG IBES data, based on results from 28 companies and market estimates for those that are yet to report.

Still, the rate excluding energy companies indicates a more modest 6.4% rise. European energy majors are seen posting profits more than 125% higher year-on-year, helped by higher oil and gas prices following disruptions to shipping through the Strait of Hormuz.

Revenue is expected to increase 11.1% yearly, compared to previous estimates of 10.5% one week ago.

Dutch chipmaker ASML, Europe's most valuable company, helped sentiment after reporting earnings above expectations and raising its 2026 sales forecast on Wednesday.

During the week of July 20, 52 companies are expected to report quarterly earnings, including Swiss drugmaker Novartis, Italian bank UniCredit, German software giant SAP and Volkswagen, all of which are expected to provide a broader read-through on European corporate demand.

(Reporting by Mirko Miorelli, Javi West Larrañaga; Editing by Matt Scuffham)