Barclays PLC (LSE:BARC) Barclays (ADR) (NYSE:BCS) said three-quarters of European companies have surpassed profit forecasts as the quarter's earnings season nears its halfway point, with the trend expected to continue.
Analysts at Barclays said in a note that companies across are more cautious about the outlook, particularly in China, but are sticking to their guidance.
In the United States, 86% of corporates reveal a more positive picture than expected, following two quarters of disappointing results.
Though costs have risen and the conflict in Ukraine has clouded optimism for the remainder of the year, majority of the corporates have left their guidance unchanged.
And despite continuing cost concerns, margins appear to be manageable, analysts said.
Compared with last year, European companies have seen an average growth of 7.7% in their earnings per share, while their US counterparts have grown by 4.3%.
Earnings remain a major support to equities despite volatile markets and rising macro worries, the note added.
April has been a turbulent month for stock markets around the world, with the STOXX 600 sinking to over one-month lows at one point, due to concerns over rising interest rates, valuations of US technology companies, the Ukraine conflict and China's COVID lockdowns.
The index rose, however, due to strong earnings
European companies are also benefiting from a weak euro, which has fallen to a five-year low against the dollar this week.
In the first quarter, the euro fell by about 2.5% against the dollar, and is expected to close April 4.5% lower, with Barclays noting a weaker currency tends to boosts the domestic value of overseas earnings.