Earnings growth in Europe – first time in 3 years
European companies are delivering growth for the first time in three years albeit concerns over Russia which held back markets at the end of last week.
Equity strategists at Morgan Stanley and Credit Suisse are somewhat upbeat pointing out to healthy earnings rates and more pronounced signs of economic recovery in the region.
European Oil & Gas, Pharmaceuticals and Automotive groups have all announced an uptick in earnings with some beating analyst expectations.
Concerns about increased Russia sanctions and the strength of the Euro, which has hovered at €1.36 to the dollar for most of the 2nd quarter remain.
BP which owns 20% of Rosneft and Renault are pointing to the lack of visibility in the political landscape and the downtrend in emerging market economies particularly in Russia might cap earnings growth for now.
Evidence of these concerns materializing can be seen in VW’s earnings which have already seen its operating profits decline by 3% year on year as a result on falling demand in Emerging Markets and currency volatility.
Source: ft
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