STOXX 600 Companies’ Profits Set to Grow 23.6% in Third Quarter
Key Facts
Profits at major companies listed on the STOXX 600 are on track for their second-strongest quarterly growth in four years, with an average increase of 23.6% expected in the third quarter, according to a Reuters report based on LSEG I/B/E/S data. The estimate draws on results from 144 companies that had reported figures by October 29, as well as forecasts for those yet to report. That puts the season among the strongest since 2022, but does not mean growth is evenly distributed across companies or sectors. The overall forecast benefits significantly from a surge in energy profits. Excluding that sector, expected growth is lower, though still above the average for previous quarters.
The expected increase is slightly below the 23.9% growth in profits in the previous quarter. But the headline figure masks a clear disparity in the sources of growth: the report expects energy-sector profits to rise 139% year over year in the third quarter. It links the surge to higher energy prices driven by the Iran war, alongside record refining margins. This means a large part of the strength in the earnings season is tied to the performance of one sector and to energy and refining factors. Growth among companies outside energy therefore remains an important measure of how broadly improvement is spreading across the index.
Excluding energy, profits at the rest of the index’s companies are expected to grow 9.8% in the third quarter, exceeding their average growth of 7.1% over the previous sixteen quarters. This estimate offers a more moderate picture than the index-wide figure, but also points to improvement beyond the sector driving the surge. On revenue, the report expects European blue-chip companies’ revenue to rise 13.6% year over year, its strongest performance since the third quarter of 2022. Revenue growth strengthens the season’s positive picture, while energy profits remain the main factor behind the strength of the overall average. Positive forecasts do not extend across all sectors.
The report expects profits to grow in 8 of 10 sectors, while forecasting contractions in real estate and consumer cyclicals, including autos, retail and leisure. The gap highlights the differing paths of companies within the index despite the strength of the overall estimate. In an update issued on October 16, analysts cut their forecast for consumer cyclical profits from 26% growth to a 2.6% contraction in the third quarter. The revision followed a decline in deliveries at Volkswagen and BMW, particularly amid weak demand in China. By contrast, they raised their forecast for technology profit growth to 32.7% from 24.4%, after ASML and Ericsson beat market estimates.
The revisions reflect a divergence between companies benefiting from strong results and others facing weak demand in key markets. Citi global equity strategist David Groman said the strength and breadth of expectations were “stronger than usual and unusual.” He added that this could lead investors to focus on companies’ forward guidance rather than simply comparing third-quarter results with market estimates. Airbus’s results offer an example of a company reporting during the season: its revenue in the first nine months of 2026 rose 7% to 50.6 billion euros, from 47.4 billion euros in the same period of 2025. The company said the nine-month results reflected “the upward trajectory of increasing civil and military production, supported by strong demand across our product portfolio.”
In the market, the STOXX 600 touched its highest level in more than a month on Thursday, with strong earnings reports helping lift sentiment. Defense and energy companies were among the biggest gainers, Reuters reported. The index’s move comes during a season in which results and forecasts vary across sectors, while the energy surge provides significant support to aggregate figures. Markets are watching for Amazon and Intel to report results after U.S. markets close on October 29. Investors continue to monitor technology companies’ spending on artificial intelligence as those results come in.