London Daily

Focus on the big picture.
Monday, Jun 02, 2025

Europe Inc earnings offer market optimists more hope

Europe Inc earnings offer market optimists more hope

Earnings from major European companies on Wednesday offered some reasons for optimism about the region's corporate health, even as investors worry about the slowing global economy.
Earnings from major European companies on Wednesday offered some reasons for optimism about the region's corporate health, even as investors worry about the slowing global economy.

Fourth-quarter earnings from ASML Holding NV (ASML.AS) exceeded expectations and the Dutch technology company, Europe's largest, forecast a rise of more than 25% in 2023 sales despite possible new curbs on exports to China.

CEO Peter Wennink said that although economic uncertainty and growing semiconductor inventories were clouding the outlook, customers see conditions improving towards the end of the year and China's economy recovering after COVID-19 curbs were ended.

"That means that the demand is still higher than what we can make," he said. Shares in ASML were lower after the results, having rallied recently to hit their highest since last April.

Shares in budget airline easyJet EZJ.L shot up more than 10% to their highest since June after it said it expected to beat market expectations this year based on the strength of bookings into summer.

Rivals Ryanair (RYA.I), Wizz Air (WIZZ.L) and BA-owner IAG (ICAG.L) got a lift too, as investors cheered the latest evidence that people will not sacrifice their holidays even as double-digit inflation leaves them with less money to spend.

Helped by strong orders in Europe, French train maker Alstom (ALSO.PA) posted an 8% rise in third-quarter sales. Its shares fell after hitting their highest in almost a year in early trade.

While it is still early in the corporate earnings season, the results offer some hope that recent economic data which has buoyed equities this month is grounded in reality.

Expectations that the economy will make a soft landing in 2023 have grown as a result of China's reopening from three years of zero-COVID policies and the fact that Europe has managed to keep the lights on through the winter, helped by warmer weather and ramped-up energy capacity.

IMF Managing Director Kristalina Georgieva said last week that the Fund's new 2023 global growth forecast, due soon, could be revised upwards slightly from a current 2.7% - a turnaround from the gloomy tone she had struck at the start of the year.

Even Germany, one of the economies most exposed to last year's soaring energy prices, is now expected to dodge a recession in 2023.

French central bank chief Francois Villeroy de Galhau said last week that the euro zone was looking more resilient than expected and should avoid a recession this year.

On Monday, a key U.S. survey showed businesses see lower odds that the United States is already in or will fall into recession this year.

That greater economic optimism has in turn raised hopes that the corporate downturn may not be as severe as feared just a few weeks ago.

The pan-European STOXX 600 index (.STOXX) is up more than 6% since the start of the year, hitting its highest since April last week after better-than-expected economic data.

The index is on course for its best January since 2015. It ended the day down 0.45%.

Results on Thursday from heavyweights SAP (SAPG.DE), Nokia (NOKIA.HE), Diageo (DGE.L) and LVMH (LVMH.PA) will be a further test.

BARELY ANY GROWTH

Expectations for fourth-quarter 2022 earnings and revenues have dimmed further, however, with Refinitiv I/B/E/S data on Tuesday suggesting European companies will see barely any revenue growth.

Sentiment on Wall Street took a turn too, as Microsoft's (MSFT.O) outlook weighed down technology stocks, and after a bleak quarterly report from Boeing.

"After a couple of strong days for Wall St on expectations the Fed is about to pause, earnings are just looking a bit wobbly," said Market.com analyst Neil Wilson.

AT&T Inc (T.N) forecast annual profit below expectations while U.S. defence contractor General Dynamics (GD.N) reported better-than-expected fourth-quarter profit, boosted by higher demand for weapons at its unit that produces Abrams tanks and combat systems.

Tesla (TSLA.O) will report after market close later on Wednesday.

Not everything was rosy in Europe. Swiss fragrance and flavour maker Givaudan (GIVN.S) posted a slowdown in end-year sales, putting further strain on margins in a year marked by high input costs and supply chain disruptions.

Swiss asset manager GAM (GAMH.S) meanwhile warned on profits after experiencing negative asset flows, knocking its shares 2.5% lower in early morning trading.

($1 = 0.8115 pounds)
Newsletter

Related Articles

0:00
0:00
Close
Ukraine Executes Long-Range Drone Strikes on Russian Airbases
Conservative Karol Nawrocki wins Poland’s presidential election
Study Identifies Potential Radicalization Risk Among Over One Million Muslims in Germany
Good news: Annalena Baerbock Elected President of the UN General Assembly
Apple Appeals EU Law Over User Data Sharing Requirements
South Africa: "First Black Bank" Collapses after Being Looted by Owners
Poland will now withdraw from the EU migration pact after pro-Trump nationalist wins Election
"That's Disgusting, Don’t Say It Again": The Trump Joke That Made the President Boil
Trump Cancels NASA Nominee Over Democratic Donations
Paris Saint-Germain's Greatest Triumph Is Football’s Lowest Point
OnlyFans for Sale: From Lockdown Lifeline to Eight-Billion-Dollar Empire
Mayor’s Security Officer Implicated | Shocking New Details Emerge in NYC Kidnapping Case
Hegseth Warns of Potential Chinese Military Action Against Taiwan
OPEC+ Agrees to Increase Oil Output for Third Consecutive Month
Jamie Dimon Warns U.S. Bond Market Faces Pressure from Rising Debt
Turkey Detains Istanbul Officials Amid Anti-Corruption Crackdown
Taylor Swift Gains Ownership of Her First Six Albums
Bangkok Ranked World's Top City for Remote Work in 2025
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
White House Press Secretary Criticizes Harvard Funding, Advocates for Vocational Training
France to Implement Nationwide Smoking Ban in Outdoor Spaces Frequented by Children
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
Russia's Fossil Fuel Revenues Approach €900 Billion Since Ukraine Invasion
U.S. Justice Department Reduces American Bar Association's Role in Judicial Nominations
U.S. Department of Energy Unveils 'Doudna' Supercomputer to Advance AI Research
U.S. SEC Dismisses Lawsuit Against Binance Amid Regulatory Shift
Alcohol Industry Faces Increased Scrutiny Amid Health Concerns
Italy Faces Population Decline Amid Youth Emigration
U.S. Goods Imports Plunge Nearly 20% Amid Tariff Disruptions
OpenAI Faces Competition from Cheaper AI Rivals
Foreign Tax Provision in U.S. Budget Bill Alarms Investors
Trump Accuses China of Violating Trade Agreement
Gerry Adams Wins Libel Case Against BBC
Russia Accuses Serbia of Supplying Arms to Ukraine
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
Chinese Woman Dies After Being Forced to Visit Bank Despite Critical Illness
President Trump Grants Full Pardons to Reality TV Stars Todd and Julie Chrisley
Texas Enacts App Store Accountability Act Mandating Age Verification
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Vatican Calls for Sustainable Tourism in 2025 Message
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
×