Europe’s Earning Season Outshines US and Japan

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.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza