LONDON (Reuters) – Europe Inc is suffering a recession with market consensus forecasting a drop in earnings in the second quarter, according to the latest data on Tuesday, underscoring concerns about the slowdown in the euro-zone economy ahead of critical data.
Companies listed on the pan-European STOXX 600 index <.STOXX> are expected report a drop in EPS of as much as 1.6%, marking a second straight quarter of decline and a corporate recession, according to the latest data from I/B/E/S Refinitiv.
Revenue for the period is seen rising by 3%.
The pain is expected to last into the third quarter too. According to the weekly data, consensus for the quarter to end-September is now pegged at a 1% drop.
The data suggests that companies are struggling with the slowdown in manufacturing as well as the escalating trade tensions between the United States and China more than the macroeconomic data would suggest.
The euro-zone’s gross domestic product, due for release on Wednesday, is expected to be resilient, with consensus forecasting a 0.2% growth, according to a Reuters’ poll.
Data for Germany also due on Wednesday is however expected to show that the bloc’s largest economy has shrunk 0.1%.
The latest consensus is also in marked contrast to the U.S. outlook, with companies there expected to report growth in the second quarter.
(Reporting by Thyagaraju Adinarayan; editing by Josephine Mason)