21st November 2017
Daniel Pfund, Senior Financial Analyst, Fund Manager
Third quarter results of European companies are slightly higher than analyst expectations. Looking at earnings, more companies have published positive results than negative (the difference is 11%, which is better than the 5% of the previous quarter). On average, companies did beat earning expectations by 2.7%.
Unfortunately, not the same can be said about sales. During the third quarter, European companies have heavily been impacted by the rising Euro. It is even the strongest quarterly rise since 4 years. Sales in foreign currencies, expressed in Euro, have hence been weaker. It is therefore not a surprise to observe a difference between sales (weak) and net results (strong). The excellent cost management of these companies has to be highlighted, which despite weaker sales, managed to maintain their margins.
It is the companies in the banking, energy, technology and telecom sectors which published best surprises compared to the consensus.