(CercleFinance.com) – The results published by European companies have so far proven to be rather disappointing for the fourth quarter, according to a study published last Friday by JP Morgan.
While the results season is now halfway through, only 52% of companies in the STOXX 600 index have reported better than expected figures in terms of profits, underlines the American investment bank.
The evolution of earnings per share (EPS) did not meet expectations either, falling by 8% from one year to the next, while the market was expecting a less marked decline of 5%, specifies the New York establishment.
For comparison, in the United States, 78% of S&P 500 companies that published their results did better than expected in terms of EPS, posting an average growth of 5% in their profit, instead of a drop of 8 % expected, recalls JP Morgan.
These positive surprises are mainly linked to the solid performance of technology, communications and non-essential consumption companies, indicates the bank.
Excluding the accounts of the ‘Magnificent Seven’, the decline in EPS of American companies would have been -4%, she adds.
In Europe, it was more stocks linked to energy and industry which disappointed expectations, notes JP Morgan.
According to its strategists, this dichotomy is consistent with the strong outperformance displayed by American stocks vis-à-vis their European counterparts in recent months.
Over the past year, the S&P 500 index has climbed more than 22% while the STOXX 600 has only increased 6%.
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