Worst Start To The European Earnings Season In A Decade

Tyler Durden's picture

The global economy may be collapsing but at least companies are making out like bandits right? Wrong. While America is enjoying yet another above average earnings season when it comes to multinationals (and certainly not financials- those have had an abysmal earnings season), Europe, which has had a very lousy week despite the makeshift triage for the EUR which will last exactly a few months, as confirmed by both yesterday's PMIs and today's German Ifo survey, is on track to experience its worst earnings season in a decade! As Bank of America summarizes, of the 49 companies that have reported so far, 36.7% have beaten and a massive 53.1% have missed. And even more surprising is that the sectors which have outperformed in the US are precisely those that are doing the worst in Europe, specifically discretionary, industrials and staples. But such is life in a relative value fiat world. Surely, Europe's corporations are now lamenting the fact that its idiotic feudal lords will do anything in their power to keep the EUR artificially high for no other reason that to rub their vanity in that special place... ignoring that this experiment in vanity massage is now costing Germany tens if not hundreds of billions in almost guaranteed economic output loss. How long before Europe's corporatocracy screams 'enough' and starts demanding that the USD take its place as the most overvalued currency? Of course since all such complaints will end up in Trichet's inbox, we expect every such lament to be met with the usual broken parrot response: "the euro is a ‘Solid, Strong, Credible Currency."

From Bank of America:

The Q2 Reporting Season well under way with 49 companies reporting Q2 earnings so far. (approx 300 will report quarterly results in total)
Data so far suggests that we're off to a very  poor start with 36.7% of companies positively surprising and 53.1% negatively surprising. This is well below historical averages of 55.4% and 37.7% respectively. 10.2% of companies have so far reported in-line numbers.
By sector, earnings beats are led by Technology (75.0%), Financials (71.4%) and Utilities (50.0%). Earnings misses are led by Discretionary (80.0%), Industrials (71.4%) and Staples (66.7%).

Notable beats & misses
On the stock front we've seen notable beats from Nokia Corp., Marine Harvest, Telenor, StoreBrand and Carnival.
Notable misses were Renewable Energy, Philips, Fortum, Castellum and Konecranes .

Notable  EPS upgrades & downgrades
We've also seen notable upgrades of Suedzucker, Tele2, Getinge, StoreBrand and Orkla.
Notable downgrades were Husqvarna, Electrolux, Kuehne & Nagel, Outokumpu and Sandvik.

h/t Paolo

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Timmay's picture

Germans losing another war it seems...

MrSteve's picture

The neutral Swiss are getting kicked too. Syngenta is off 4.5+% with pricing hurting them in H1 per Reuters. SYT is world's biggest seed and pesticide, err- crop protection producer....

LawsofPhysics's picture

If this doesn't kill the EURO, then nothing will. CDS counter party risk anyone?  Someone's pound of flesh must be taken.

TruthInSunshine's picture

They're going to depreciate the EUR intentionally, taking a play right out of Bernanke's play book.

A small selection of what I wrote in response to Lizzy's statement in another thread:

The EU, if Merkel & Sarkozy are to be believed, has decided to allow the ECB to follow in nearly the identical footprints of the Bernank circa-2008 to present.

In other words, they are going to print lots of euros, buy massive amounts of spoiled assets from troubled european banks, make whole holders of toxic sovereign bonds (Merkel, Sarkozy & Bernuslconi all said NO defaults will be allowed), and they are going to backstop the toxic loans, debt and derivatives exposure (apparently) that haven't yet blown up, but that is still coursing through the veins and arteries of Europe's public and private sectors.


This is taking the TARP/TALF/QE play out of the playbook, and running with it, but they are adding a reverse 'Plaza Accord' type deal to the mix, whereby they are going to knowingly depreciate the EUR against most other major currencies (and I'd be surprised if foreign central banks didn't sign off on this so as to not interfere and run resistance to the end result).



LawsofPhysics's picture

time to front run the FX and buy more physical.

Sudden Debt's picture

This has surely nothing to do with frosting US earnings with EU revenue.



jus_lite_reading's picture

Crisis? What crisis? 

The YEN looks fine today vs the dollar. No intervention necessaary!!!! 

slaughterer's picture

Don't the European CFOs know how to work their analysts' consensus expectations down a penny below their actual earnings before they announce?  Then they should learn from the Americans how to do it! 

Bowgett's picture

Hmm. This looks like a booming recovery to me.

slewie the pi-rat's picture

it's an inflationary radioactive recession, BiCheZ

slewie is wearing his 1600/40 hat


jus_lite_reading's picture

This is a recorded message: The EURO is a strong, solid reliable currency. Repeat. The EURO is a stronnnn bzzzzzzzz kaplat!!

As my other favorite daily read likes to call Trichet: he is a "circus clown"!!!! LMAO! SO TRUE!!!


Good post today about the IEA cutting oil release off. 


Atomizer's picture

That's my 5:30 PM pitstop. Enjoy his witty writing style.

jus_lite_reading's picture

YUP thats what keeps me coming back...... need some relief from the seriousness of the insanity!!! got them on twitters and follow Tyler and FF very closely

espirit's picture

The EU has each other member looking over others' back, so it's much more difficult to lie about earnings, unlike the US ponzi.


Sounds bullish.

espirit's picture

The US layoffs will continue until unemployment is <5%, GDP increasing, and the debt dillema resolved.

I can change how "it's" calculated, right?

Nothing to see here, move along EU.

jus_lite_reading's picture

Sure all bad news is NOW ALWAYS BULLISH


thats the clear sign of a ponzi!!! and BEnrons hand is in the jar

P Rankmug's picture

I have to consider whether ZH with its relentless accurate negative financial assessments is playing its part in the grand scheme.  Encouraging the shorts who still believe in rationality and then get slaughtered on the next manufactured and manipulated move up.

At some point when the FE desire, it will all end and ZH will be right.  Is ZH complicit?  In the meantime, welcome to the slaughter house.....

SheepDog-One's picture

I suppose those dumb enough to make investing plans based upon an article deserve all the slaughtering they get.

Dreadker's picture

People are still in the markets?  I thought cyberdyne systems had all that covered now? ;-)

jus_lite_reading's picture

LMAO!! THAT was funny!!! Are you the new board comedian?? LMAO!! PUT THE BOTTLE DOWN 


Piranhanoia's picture

I don't remember there being any editorial encouragement to do anything but shovel, sift, pan, select and assay.  

unununium's picture

Here's a tip for you, as you navigate your relativist universe and fight off those voices telling you to do terrible things.



Try to exlpain how shorting works to someone who does not actively trade. They look at you like you lost your mind and say that does not make any sense. SHORTING = wall st's total control function.

lolmao500's picture

So let me get this straight... Europe puts all the toxic debt on Germany... and now Germany is about to go booom due to the worst earnings in a decade +?

This is gonna be fun.



SheepDog-One's picture

Maybe Germany is intentionally tanking it, way more effective than V-1 rockets.

jus_lite_reading's picture

What? BEnron said the recovery is selfsustaining!! GREEN SHOOTS is what he promised us... you mean we wont get it this year?

espirit's picture

Sorry, but you may have mis-interpreted.

He said "Green Chutes".

Needosh's picture


Dreadker's picture

Missing their targets gives much room for 'growth' and a 'v shaped recovery' because its all 'transitory'....


Caravaggio's picture

Another wet dream, Tyler?
Faint screams from the backyard of the world. The sooner you get to the place, reserved for you, the better for everyone.

mayhem_korner's picture

Is there an encoded point in your comment?  I can't find it.

Freebird's picture

Yup. Must be an Italian bondholder.

Freebird's picture

Of course, an Italian, Italian bondholder...whose seen Goodfellows too many times.

Freebird's picture

That's the one Mayhem. Hey, what do we do now we have this
guys IP address? LOL

Atomizer's picture

Interesting article published back in June.

Learning from crises

Speech by State Secretary Morten Søberg

israhole's picture

And in debased Euros, to boot.

GeneMarchbanks's picture

'From Bank of America:' 

Wait. BoA is still in business?! Who knew...

shushup's picture

I guess their analysts aren't on the take like ours.

ThirdCoastSurfer's picture

If you don't have this link in your favorites, it's a good add if you like to follow Europe:


Retail sales in England remain up while Italy is down. 

RobotTrader's picture

So what happens to European stocks when things actually get better and Greek bond yields crash from 40% down to 16%?

sbenard's picture

That can't be! Surely, Wall St recognizes the risk and has priced it all in! Surely, they would let us all know if it's time to run for cover and protect our cash! No? (tongue-in-cheek)

The truth is that Wall St suffers from a serious disease called hubris obliviana, fueled by endless government interventions, bailouts, stimulus, and Fed money expansion. One of the "unexpected" consequences of this monetary heroin in that Wall St has lost all percpetion of risk. They reflexively  have too much unending faith in the power of government to fix all their troubles. Thus, they are setting us all up for even more risk -- risk the government can not avert because it is the CAUSE!