European companies are heading into their strongest quarterly earnings season in more than three years, and almost none of it is about AI.
STOXX 600 constituents are forecast to grow second-quarter profits by 15.3% year on year, according to LSEG I/B/E/S data compiled by analyst Tajinder Dhillon and published on 9 July.
That works out at €156.8bn against €136.1bn a year earlier, across the 318 constituents with comparable data. If it lands, it would be the strongest quarter since the final three months of 2022.
Strip out energy and the number collapses to 6%. The equivalent ex-energy figure for the S&P 500, on the same LSEG methodology, is 19.6%. T
The 💜 of EU tech
The latest rumblings from the EU tech scene, a story from our wise ol’ founder Boris, and some questionable AI art. It’s free, every week, in your inbox. Sign up now!
hat is the gap, and it is the reason a headline growth rate that would ordinarily read as a European revival reads instead as a caveat. It is also the same gap that shows up in adoption data and in the stalled gigafactory programme, now expressed in earnings.
The forecast has also been climbing all year, which is worth holding onto. LSEG had the quarter at 5.2% on 1 October, 12.7% by 1 April, and 14.5% on 1 July. Analysts have been marking up, not down, and the 15.3% is an estimate being compared against a prior year of actuals.
Energy is doing almost all of the lifting. LSEG has the sector at 112.4% earnings growth and 45.7% revenue growth, comfortably the strongest of any sector on the index. Healthcare is the weakest at minus 2.4%.
Behind that sits crude. Brent averaged $103.28 a barrel across the second quarter against $68.01 in the same period of 2025, roughly 52% higher, on US Energy Information Administration spot data. The war between the US and Israel and Iran, which began at the end of February, is the reason.
The direction of travel inside the quarter is less flattering than the average. Brent peaked at $124.24 on 30 April and fell steadily from there, averaging $85.40 in June and touching $68.53 on 2 July, briefly below pre-war levels.
A quarterly profit and loss is scored on the average; third-quarter guidance will be scored on the exit rate, and the exit rate looks nothing like the print.
Whether that matters depends on a war that has not settled. The Islamabad Memorandum was signed on 17 June, but the US struck Iranian targets again on 8 July and reinstated a naval blockade on 15 July, with Brent back above $80.
Anyone modelling a peace dividend into European energy earnings is modelling something that has not happened.
The clearest AI-linked earnings in Europe came, as usual, from one company. ASML reported second-quarter net sales of €9.33bn on 15 July against guidance of €8.4bn to €9.0bn, with a gross margin of 54% against guidance of 51% to 52%, and net income of €2.92bn.
It raised full-year sales guidance to €43bn to €45bn, up from €36bn to €40bn three months earlier, the second increase of the year.
“Ongoing AI-related investments and continued progress in AI technologies are driving demand for advanced Logic and Memory chips,” chief executive Christophe Fouquet said. “Our order intake remained extremely strong in the first half of the year.”
The company is adding 30% to its 2027 low-NA EUV and DUV immersion capacity, taking it to roughly 65 and 130 units respectively, with a further 30% under consideration for 2028. It guided third-quarter sales of €11bn to €12bn at a gross margin of 55% to 57%.
ASML is one company. The rest of the index is where the argument lives. Consumer cyclicals are forecast at 11.6% and consumer non-cyclicals at 5.2%, with autos carrying weak Chinese demand and higher energy prices pressing on sentiment at home.
Europe’s structural position has not moved, and the AI capital that is arriving on the continent is arriving mostly as debt raised by American companies.
The read is not unanimous. Goldman Sachs’s chief global equity strategist Peter Oppenheimer argued on 2 July that AI infrastructure spending “does not stay bottled up inside five US megacaps” and will trickle into better earnings growth elsewhere. Reporting season starts settling that in the next fortnight.
