European earnings growth is expected to slow from second-quarter levels as companies enter the peak reporting season across the region.
Companies listed on Europe’s STOXX 600 index are expected to record a 19.4% increase in third-quarter earnings compared with a year earlier, with the energy industry accounting for a significant share of the growth, according to LSEG I/B/E/S data released Thursday.
The projected increase represents a slowdown from the second quarter, when earnings received stronger support from several major sectors.
When energy companies are excluded, earnings across the STOXX 600 are expected to grow 9.9%. Cyclical consumer goods firms are projected to lead the gains, while expectations for the technology sector have also improved.
Technology earnings are now forecast to climb 23.8%, significantly above the 13.1% estimate issued in July.
The energy sector is expected to post a 98.6% rise in earnings, compared with 138.6% growth recorded in the second quarter. Higher fuel prices have helped support the sector, with Brent crude gaining about 14% in September and diesel refining margins climbing to a record level.
Real estate is projected to suffer the sharpest decline among the sectors, with earnings expected to drop 71.4% compared with the same period a year earlier.