Third-quarter earnings: a mixed bag

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So far, two thirds of the companies included in the Stoxx Europe 600 index have reported their third-quarter 2023 results. On average, figures have fallen short of consensus estimates. Earnings per share (EPS) have come in 6% below expectations in stark contrast with the positive surprises that have been reported every quarter for the past two years.

Top-line revenue also missed the mark, coming in 4% below expectations on average. Positive sales surprises have become increasingly rare since this time last year.


In September’s edition of our Macroeconomic Outlook, we indicated that quarterly results may prove disappointing. Markets have been pricing in relatively solid sales and profit growth which, although reasonable, was overly optimistic.

The key factor at play is a gradually deteriorating economy combined with high interest rates that are dampening global momentum. High interest rates are also eroding companies’ net margins by pushing funding costs upwards.

The disappointment has drawn a relatively muted reaction from stock markets with the Stoxx Europe 600 slipping 3.7% in October before partially recovering in early November. That being said, certain stocks were subjected to extreme volatility.


Written on November 10, 2023. This is not an investment advice. Opinions subject to change.

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