European corporates head for best earnings growth in three years

May 7 (Reuters) - Estimates for European blue-chip companies earnings ​are heading ⁠for their strongest growth since the ​first quarter of 2023, the latest LSEG I/B/E/S data showed on Thursday, thanks in part ​to ‌soaring profits for energy majors.

Earnings of European blue-chips are now expected to have grown 10.2% ⁠year-on-year in the first quarter, on average, based on ⁠results from 211 STOXX 600 ​companies and market estimates for those that are yet to report, the data showed.

Though earnings of energy companies - expected to grow by a breathtaking 48.4% - skew the ​average, ‌non-energy companies are seen posting 5.7% higher earnings year-on-year.

* However, the outlook for revenues has worsened from last week's 0.7% increase

* STOXX 600 companies are now forecast to report a meagre 0.2% revenue growth

* Weak revenue growth coupled with ​higher earnings may be a sign that companies' efforts to cut costs and ‌restructure businesses could be paying off

* According to the report, 60.2% of companies beat earnings estimates

* European energy majors have ‌benefited from higher oil prices due to the war in the Middle East

* Though crude futures have fallen on hopes of a peace deal, they are ​still about 35% above pre-war levels

* The real estate sector, on the other hand, is ‌expected to post earnings 14.3% below those of last year

* Europe's benchmark STOXX 600 index quickly lost most of its 2026 gains after the U.S. and Israel ⁠struck ⁠Iran in February

* It has since partially recovered, ‌but it is still about 2% below pre-war levels

* Despite the turnaround, the outlook for STOXX 600 companies ​is in ​contrast with that of U.S. listed S&P 500 firms

* Earnings ‌of S&P 500 companies are expected to rise 27.8%, mostly thanks to technology companies' 51.9% growth, according to a separate LSEG I/B/E/S note from Friday