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Europe Inc’s recession expected to deepen as third-quarter earnings outlook deteriorates: Refinitiv

Europe Inc’s recession expected to deepen as third-quarter earnings outlook deteriorates: Refinitiv

FILE PHOTO: A trader works as a screen shows market data behind him at CMC markets in London, Britain, December 11, 2018. REUTERS/Simon Dawson/File Photo LONDON (Reuters) – Europe’s corporate recession is expected to deepen, according to the latest forecasts, as companies struggle with uncertainties from Brexit and the protracted U.S.-China trade spat and Germany’s

FILE PHOTO: A trader works as a screen shows market data behind him at CMC markets in London, Britain, December 11, 2018. REUTERS/Simon Dawson/File Photo

LONDON (Reuters) – Europe’s corporate recession is expected to deepen, according to the latest forecasts, as companies struggle with uncertainties from Brexit and the protracted U.S.-China trade spat and Germany’s manufacturing recession.

Companies listed on the STOXX 600 regional index are now expected to report a drop of as much as 3.7% in third-quarter earnings, worse than the 3% fall expected a week ago, according to I/B/E/S data from Refinitiv.

That compares with growth of 14.4% in the year-earlier quarter and would be the worst EPS since Q3 2016 when earnings fell 5%.

Companies in the region have been in an earnings recession since the second quarter when earnings dropped 2.1%, their second straight quarterly fall.

Consensus for revenue improved slightly with forecasts for flat growth, compared with a 5.9% rise a year ago and 3.3% growth in Q2.

Q4 forecasts were reined in slightly – EPS is now expected to grow 9.1%, down from 9.6% last week and forecasts are for a 3.2% rise in revenue, down from 3.4% last week.

Reporting by Josephine Mason

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