(Finance) – With around 75% of European companies reporting i results for the second quarter of 2023it can be seen that the earnings growth was -17% year over year (-32% excluding financials; -17% excluding financials and energy), i.e. first negative growth in earnings per share (EPS) in three years, with energy the main drag and financials the main contributor positive for growth. You read it in a search of BofA global research.
The second-quarter run rate for EPS growth is now slightly above the consensus forecast for -20% at the start of the earnings season for companies reporting thus far, resulting in a median +3% EPS surprise (from -0.4% at the start of the season and in line with the long-term average) and upward revisions of the second quarter EPS consensus estimates, with an upgrade of 3.7% since the start of the season.
The “EPS beats“, or when the earnings per share surpasses the consensus, are improved from less than 50% at the start of the season to 54%, but that still leaves them down from 63% in the first quarter. Deeply negative macroeconomic surprises in the euro area suggest room for further weakening of EPS beats in the third quarter.
At the industry level, the banks (86%) and average (80%) posted the strongest beats this earnings season, while insurance (14%) and chemicals (30%) posted the weakest beats. Among the major countries, Italy and Spain recorded strong positive surprises (8% each), while for Switzerland the surprises were slightly negative (-1%).