Europe's biggest public companies are expected to increase earnings by 13.4 per cent in the second quarter

Lucy White
France, Belgium and the Czech Republic are the only countries expected to have negative earnings growth (Source: Getty)

The second-quarter earnings of Europe's largest listed companies are expected to shoot up by 12.4 per cent this year, according to research from Thomson Reuters.

According to a study of analysts' estimates of companies listed on the Stoxx 600 Index, the UK will have the second highest earnings growth at 50 per cent – behind Norway at 67 per cent.

Of the 16 countries represented in the Stoxx 600, just France, Belgium and the Czech Republic are expected to have negative growth.

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“Through August, 1,156 companies in the Stoxx 600 Index reported earnings for the second quarter of 2017,” said Thomson Reuters senior research analyst David Aurelio.

“In aggregate, companies are reporting earnings that are 9.1 per cent above estimates, which is above the four per cent long-term (since 2011) average surprise factor and above the 4.4 per cent surprise factor recorded over the past four quarters.”

Stoxx 600 Earnings Growth Estimate Trend

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To date, 156 companies on the index have reported earnings for the quarter and 49.4 per cent exceeded analyst estimates. Typically 50 per cent exceed estimates.

Companies in the energy sector are expected to post the highest earnings growth rate at 49.2 per cent, totalling €6.2bn (£5.56bn), while utilities is the lowest with expected shrinkage of 22.6 per cent.

Financial companies are predicted to be middle-of-the-road in terms of growth rate, but will bring in the most earnings with a predicted €28.9bn.

Next week, 41 Stoxx 600 companies with quarterly earnings estimates are scheduled to report their earnings.

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