Salem Radio Network News Tuesday, October 14, 2025

Business

European earnings outlook brightens despite US-China tariff escalation

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By Marleen Kaesebier and Javi West Larrañaga

(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 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 and automaker Volvo AB due to report earnings this week.

On Tuesday, French tyre producer Michelin 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, Mercedes-Benz and Daimler Truck.

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

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