Virus-hit corporate profits seen sliding further in Europe

FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, May 4, 2020. REUTERS/Staff

LONDON (Reuters) - Corporate profits expectations for the second and third quarters continued to deteriorate sharply in Europe, Refinitiv data showed on Wednesday, as fears about the scale of the recession triggered by the coronavirus pandemic continue to grow.

Companies listed on the pan-European STOXX 600 .STOXX are now expected to report a 44.9% decline in earnings in the second quarter, down from a 40.4% drop forecast the week before.

For the third quarter, analyst expectations are now set for a 32.7% fall in earnings versus 29.1% a week ago.

While many governments in Europe have announced or started to implement strategies to gradually ease lockdowns set up to flatten the curve of the epidemic, there is currently little hope the economy will bounce back, let alone return to normal, before the first quarters of 2021.

Before the outbreak, analysts were expecting Europe to end in the first quarter a corporate recession, which lasted throughout 2019.

Reporting by Julien Ponthus; Editing by Himani Sarkar