European Earnings Season: Q2 earnings: Growth accelerates, earnings beats rebound

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European Earnings Season

Q2 earnings: Growth accelerates, earnings beats rebound

European Q2 EPS growth is tracking at 22% year-on-year, up from 16% a week ago and on track for

the strongest quarter since Q3'22. With around 65% of companies having reported, representing nearly

75% of index earnings, Financials and Energy remain the largest contributors to growth, but earnings strength

has broadened, with ex-Financials and Energy EPS growth running at 16% versus expectations of 12%.

Stronger-than-expected results have continued to feed through into forecasts, with consensus Q2 EPS

estimates rising by a further 2% over the past week and 4% since early July. Sales growth expectations have

also edged higher to 7% from 6% a week ago, marking the strongest sales growth outlook since Q3'22.

03 August 2026

EPS beats rebound to a 13-quarter high: 56% of companies have beaten EPS expectations so far, up

sharply from 47% a week ago and at their highest level since Q1'23. This is notably stronger than the levels

implied by the deeply negative Euro area economic surprise backdrop in Q2 and leaves EPS beats slightly

above their long-run average of 53%. Financial Svs (94%), the UK (73%), US exposure (66%) and Low Growth

(65%) have registered the strongest EPS beat rates so far. Sales beats have strengthened further to 61%, also

the highest since Q1'23.

Sebastian Raedler >>

Investment Strategist

MLI (UK)

Cyclicals stage a meaningful turnaround: after a weak start to the season, cyclicals’ EPS beats have

improved to 55%, the highest level in three years, while cyclicals’ earnings growth is tracking at 13% year-onyear. Despite this improvement, cyclicals’ Q2 EPS expectations have been revised down by 3% since early July,

driven largely by Autos. Technology remains a notable area of strength within cyclicals, posting a 78% EPS

beat ratio - its strongest beat outperformance versus the broader market since Q4'15.

Thomas Pearce, CFA >>

Investment Strategist

MLI (UK)

Guidance remains resilient, the market differentiates sharply: the Guidance Revision Ratio has risen

further to 0.81, its strongest level since Q2'21.…