(Reuters) – European companies are set to post their worst quarterly results since the start of 2024, even if their economic outlook has improved slightly, according to the latest profit forecasts published on Tuesday.

The continent’s groups are expected to record, on average, a 0.2% drop in third-quarter profits, according to LSEG I/B/E/S data, which is lower than the 0.6% drop that analysts expected a week ago.

However, these forecasts contrast sharply with the 12.5% ​​growth expected before US President Donald Trump announced last February his intention to impose a salvo of customs duties against the United States’ main trading partners.

Estimates for the turnover of European companies in the STOXX 600 have also been revised downwards, with the data now anticipating a decline of 0.3% compared to last year.

A year ago, profits of STOXX 600 companies averaged an increase of 7.8% in the third quarter, while their turnover fell by 1.1%.

In the second quarter of 2025, the profits of European groups increased by 4% year-on-year.

This earnings season could show how European companies are coping with a tense business environment and whether they are benefiting from the framework agreement reached between the United States and the European Union (EU) in July, intended to clarify relations between the two partners.

SEB shares and Aston Martin shares plunged on Monday after the French company cut its profit forecast and the British carmaker warned of a bigger-than-expected full-year loss due to weaker demand and U.S. surcharges.

Euro zone corporate profits are, however, expected to improve in 2026 thanks to a number of catalysts, JP Morgan analysts said in a note published on Monday, raising their recommendation on the bloc from “neutral” to “overweight”.

(Written by Javi West Larrañaga and Marleen Kaesebier, Diana Mandia, edited by Blandine Hénault)

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