'Fasten your seatbelt': Investors brace for Europe Inc. results
Reining in costs and preserving cash - the qualities investors are now looking for in big companies.
It comes as Europe inc. prepares to report the steepest profit fall since the 2008 financial meltdown.
Firms in the pan-European STOXX 600 index are expected to release figures showing a 22% plunge in first quarter earnings.
With business virtually grinding to a halt, Refinitiv data predicts earnings will be down over a third in the second quarter and 25% in the third.
Banks will be among those hit.
Barclays and Citi expect a 40 to 50% slide in profits and dividends by the end of the year.
The STOXX 600 has bounced 22% from lows in mid-March, when social restrictions were being put in place.
But the index is still down 26% this year.
The big question from analysts is whether investors will get outlooks from companies in order to navigate the equity market.
Saxo Bank, among the first few blue chips to report, said it could not issue a formal full-year outlook.
And VW withdrew its outlook for 2020 after reporting an 81% drop in first-quarter operating profit.
Credit Suisse, Sanofi and Volvo are some of the major companies expected to report this week.
Cyclical sectors, such as airlines, restaurants, and leisure firms, will likely be hit hardest.
Some industries are bucking the trend though.
Sales and profit margins at Dutch health technology company Philips could still rise this year, although the firm said that's dependent on hospitals being able to restart elective operations.
Its results will partly reflect strong orders for medical ventilators.
Others are benefiting from lockdowns too, with media firms getting a boost.
Shares in French conglomerate Vivendi jumped 2.9% on Monday (April 20) after reporting a higher first-quarter revenue, led by its music division Universal.
