European corporate health improves as latest earnings results defy pessimistic forecasts
European firms report better than expected results for the final quarter of 2025. The outlook is improving as companies adapt to shifting global trade rules.
Insights:
LSEG I/B/E/S released updated forecasts today, February 19, 2026, revealing that the expected decline in earnings for firms within the STOXX 600 index is less severe than previously estimated. The new data projects a 0.6% drop in fourth-quarter earnings for 2025, a significant improvement from the 1.1% decrease forecast just one week earlier. This revision signals a milder earnings contraction for European companies as the current reporting season continues to unfold, effectively shifting near-term expectations for the regional benchmark.
The narrower decline is supported by a majority of firms outperforming analyst projections. According to the update, 57.1% of reported companies in the index have beaten earnings estimates so far. Furthermore, revenue forecasts have also seen an improvement, providing additional evidence of resilience among European corporates. These factors combined have led to a more tempered outlook for the quarter, suggesting that the impact of economic headwinds may be less pronounced than initial models had suggested.
