London Daily

Focus on the big picture.
Monday, Jun 23, 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
Starmer Invites Innovators to Join Government Talent Scheme
UK Economy’s Strong Opening Quarter Shows Signs of Cooling
Harrods Seeks Court Order to Secure Al Fayed Estate for Victims
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
WATCH: Israeli forces show the aftermath of a massive airstrike at Iran's Isfahan nuclear site
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
We have new information and breaking details to share about what is shaping up to be a historic air campaign tonight
Six Massive Bombs Dropped on Fordow; Trump: 'A Historic Moment for the U.S., Israel, and the World'
Fordow: Deeply Buried Iranian Enrichment Site in U.S.–Israel Crosshairs
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Pakistan to nominate Trump for Nobel Peace Prize.
BBC Demands Perplexity AI Immediately Stop Using Its Content
Telegram Founder: I Will Leave My Fortune to Over 100 of My Children
Political Turmoil Resurfaces in Belgium Amid Economic Concerns
Fed policymakers divided on timing of interest rate cuts
Trump signals imminent agreement with Harvard University
Inheritance tax referendum alarms Swiss billionaire community
Japan cancels bilateral security meeting amid US defence demands
AI skeptic Emily Bender warns that ‘the emperor has no clothes’
Israel Confirms Assassination of Quds Force Commander in Tehran
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
FBI and Senate Investigate Allegations of Chinese Plot to Influence the 2020 Election in Biden’s Favor Using Fake U.S. Driver’s Licenses
Vietnam Emerges as Luxury Yacht Destination for Ultra‑Rich
Plans to Sell Dutch Embassy in Bangkok Face Local Opposition
China's Iranian Oil Imports Face Disruption Amid Escalating Middle East Tensions
Trump's $5 Million 'Trump Card' Visa Program Draws Nearly 70,000 Applicants
DGCA Finds No Major Safety Concerns in Air India's Boeing 787 Fleet
Airlines Reroute Flights Amid Expanding Middle East Conflict Zones
Elon Musk's xAI Seeks $9.3 Billion in Funding Amid AI Expansion
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Israeli Airstrike Targets Iranian State TV in Central Tehran
President Trump is leaving the G7 summit early and has ordered the National Security Council to the Situation Room
Taiwan Imposes Export Ban on Chips to Huawei and SMIC
Israel has just announced plans to strike Tehran again, and in response, Trump has urged people to evacuate
Netanyahu Signals Potential Regime Change in Iran
Juncker Criticizes EU Inaction on Trump Tariffs
EU Proposes Ban on New Russian Gas Contracts
Analysts Warn Iran May Resort to Unconventional Warfare
Iranian Regime Faces Existential Threat Amid Conflict
Energy Infrastructure Becomes War Zone in Middle East
UK Home Secretary Apologizes Over Child Grooming Failures
×