European earnings outlook brightens despite US-China tariff escalation (updated)

Porsche Automobil Holding SE

14/10/2025 14:10

European Q3 earnings seen up 0.5% vs down 0.2% last week

Revenues seen up 0.4% vs 0.3% fall expected last week

Q3 results from ASML and Volvo AB due later this week

Adds revenue forecast, context in paragraphs 3-10

By Marleen Kaesebier and Javi West Larrañaga

Oct 14 (Reuters) - Analysts are a little more upbeat about European companies' third-quarter results than a week ago, according to the latest estimates compiled by LSEG I/B/E/S, despite the latest flare-up in trade tensions between the U.S. and China.

European companies are on average expected to report a 0.5% year-on-year increase in third-quarter earnings, the data showed. That is better than the average 0.2% fall predicted a week ago.

It would, however, still be the worst quarterly performance since the first quarter of 2024.

TARIFFS WEIGH ON EARNINGS EXPECTATIONS

On Friday, the U.S. said it would slap an additional 100% tariff on imports from China and impose export controls to China on all critical U.S.-made software from November 1 in a move that has weighed on the pan-European STOXX 600 .STOXX this week.

Before U.S. President Donald Trump announced his tariff plans in February, analysts were expecting European companies to report 12.5% growth in third-quarter earnings, on average.

Since then, around 72% of companies in Europe, the Middle East and Africa tracked by Reuters have flagged price hikes, as global import taxes have surged.

Third-quarter revenue estimates for European companies listed on the STOXX 600 have also improved from last week, according to the LSEG data. They are now forecast to rise 0.4% year-on-year, against the 0.3% fall expected last week.

Investors will be on alert for any company comments about tariffs, with chipmaking supplier ASML ASML.AS and automaker Volvo AB VOLVb.ST due to report earnings this week.

On Tuesday, French tyre producer Michelin MICP.PA cut its full-year operating income guidance, citing worse than expected business conditions in the North American market, sending its shares and those of other European car part suppliers down.

That followed similar comments from German automakers Porsche P911_p.DE, Mercedes-Benz MBGn.DE and Daimler Truck DTGGe.DE.

Expectations of Q3 2025 STOXX 600 earnings https://reut.rs/4n5uu19

 (Reporting by Marleen Kaesebier and Javi West Larrañaga in Gdansk. Editing by Milla Nissi-Prussak and Mark Potter)

 ((javier.west@thomsonreuters.com +34 918 35 61 12; marleen.kaesebier@thomsonreuters.com +48 58 769 65 76))