Barclays (LSE:BARC) said first-quarter earnings-per-share growth is currently running at its strongest pace in more than three years across Europe and more than four years in the United States, based on the bank’s assessment of the ongoing earnings season.
According to Barclays’ analysis, blended EPS growth stands at 27% in the U.S. and 7% in Europe, which would represent the strongest quarterly performance since the fourth quarter of 2021 in the U.S. and the first quarter of 2023 in Europe. Among companies that have already released results, EPS growth is tracking at 16% in the U.S. and 4% in Europe.
European Companies Beat Expectations but Outlook Turns More Cautious
Barclays noted that European businesses have generally delivered earnings results in line with market expectations. However, corporate guidance has become more cautious due to the impact of ongoing geopolitical conflict.
The bank’s review of European earnings call transcripts found that roughly 75% of reporting companies have been affected by the conflict through weaker demand conditions, supply chain disruption or increased input costs.
AI and Technology Drive Stronger U.S. Earnings Revisions
The bank also said full-year 2026 EPS revisions in the U.S. have moved back into positive territory, led primarily by artificial intelligence and technology-related sectors. This has widened the performance gap between U.S. and European earnings expectations.
Energy and semiconductor companies have received some of the largest upgrades in both markets, contributing to higher forecasts for FY2026 earnings growth overall.
Financials and Consumer Sectors Show Mixed Performance
Within Europe, sectors including Financials, Materials and Consumer Discretionary recorded some of the strongest earnings beats. In the U.S., Technology and Consumer Staples companies were among the leading performers during the reporting season.
Most other sectors, however, experienced modest earnings downgrades. Barclays said the majority of downward revisions were concentrated in consumer-focused industries such as luxury goods, automotive and leisure.
Global Earnings Revisions Begin to Stabilize
Barclays added that global EPS revisions have started to stabilize as recent economic indicators and activity data, including purchasing managers’ indexes, have shown some improvement.
Nevertheless, the stronger economic momentum remains largely concentrated in the United States, while earnings revisions across Europe continue to trend slightly negative.
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