European markets traded modestly lower on Thursday as investors assessed a fresh wave of corporate earnings against a backdrop of heightened geopolitical uncertainty.
At 08:02 GMT, Germany’s DAX was down 0.3%, France’s CAC 40 eased 0.2%, and the UK’s FTSE 100 declined 0.2%.
Earnings updates dominate
The reporting calendar remains busy, with the season broadly constructive so far — roughly 60% of European companies have exceeded profit expectations to date.
Pernod Ricard (EU:RI) posted a 5% drop in second-quarter like-for-like sales, reflecting continued weak consumer demand and inventory reductions in the United States and China. However, the decline was less severe than the 7.6% contraction recorded in the prior quarter, supported by stronger trends in India and global travel retail.
Rio Tinto (LSE:RIO) delivered flat underlying earnings for 2025, as higher copper and aluminium volumes and tighter cost discipline offset softer iron ore prices.
Renault (EU:RNO) reported a net loss of €10.93 billion for 2025 after booking a €9.3 billion non-cash accounting charge tied to a revised treatment of its Nissan stake. Underlying operations remained resilient, with revenue rising 3%.
Nestlé (BIT:1NESN) announced a 17% decline in annual net profit and a sharp margin contraction in 2025, as restructuring costs, asset impairments and a December infant formula recall weighed on results.
Zurich Insurance (TG:ZFIN) achieved a record operating profit of $8.9 billion for 2025, up 14% year on year, driven by improved underwriting in property and casualty and growth across its business segments.
Airbus Group (EU:AIR) reported a slightly better fourth-quarter profit but issued a softer-than-expected aircraft delivery forecast for 2026 due to engine supply constraints.
Air France-KLM (EU:AF) posted its first-ever operating result above €2 billion, with revenue gains and lower fuel costs offsetting higher airport fees and labour expenses.
Krones (TG:KRN) exceeded profitability expectations in the fourth quarter, though revenue slightly missed forecasts, as the German packaging equipment maker continued to expand margins despite macroeconomic headwinds.
Geopolitical tensions remain elevated
Beyond earnings, geopolitical risks continue to influence sentiment. Ukrainian and Russian negotiators held their third U.S.-brokered meeting of 2026 this week, but talks failed to produce progress on core disputes, including territorial issues.
Russia is reportedly demanding that Ukraine withdraw from the remaining 20% of the eastern Donetsk region not under Moscow’s control — a condition Kyiv rejects.
Meanwhile, nuclear negotiations between the United States and Iran in Geneva yielded limited progress. U.S. Vice President JD Vance said Washington was considering whether to continue diplomatic engagement with Tehran or pursue “another option”.
Satellite imagery suggests Iran has constructed a reinforced concrete structure at a sensitive military site, later covered with soil, potentially advancing work at a location reportedly targeted by Israel in 2024.
Oil prices extend gains
Oil prices continued to climb, supported by rising geopolitical risks in the Middle East that have heightened concerns about potential supply disruptions.
Brent crude rose 1% to $71.04 per barrel, while U.S. West Texas Intermediate gained 1.1% to $65.75 per barrel.
Both benchmarks had surged more than 4% on Wednesday, marking their highest closing levels since January 30.
Reports of increased military and naval activity in the Persian Gulf have reinforced fears of supply vulnerability. At the same time, hopes for relaxed sanctions on Russian energy exports faded after the latest Russia-Ukraine talks failed to produce a breakthrough.
Additional support came from industry data showing tighter U.S. supply conditions. The American Petroleum Institute reported a decline of around 609,000 barrels in U.S. crude inventories for the week ending February 13. Official figures from the Energy Information Administration are due later Thursday.
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