Europe’s earnings season has so far churned out generally positive results — something that could help regional stocks continue to outshine their U.S. and Japanese peers in the coming months.
On Wednesday, German automaker Volkswagen unveiled a 17 percent jump in first-quarter operating profit on cost cuts and improving demand in Europe. Meanwhile, the U.K.’s biggest household goods retailer – Home Retail Group – posted a 14 percent rise in annual profit.
Of the 107 European companies that reported earnings up to Monday’s close, 60 beat sales estimates, while 18 missed, Barclays said in a note on Wednesday. Some 25 firms beat estimates on earnings per share (EPS), while 16 missed.
“The median sales and earnings surprise is a strong 1.4 percent and 2.8 percent respectively,” Barclays said.
Aided by a 20 percent fall in the euro’s value against the dollar in the past year, a 40 percent slide in oil prices since last June and a one trillion euro ($1.10 trillion) stimulus package from the European Central Bank, European equity markets have had a stellar start to 2015.
The pan-European Euro Stoxx 600 index has soared almost 19 percent so far this year, outpacing a 2.7 percent gain in the S&P 500 index of U.S. stocks, and a 15 percent rally in Japan’s blue-chip Nikkei.