The latest Charles Stanley Earnings Tracker has noted a significant fall over the past month in earnings estimates for S&P 500 companies, with year-on-year earnings growth expected to be around 0.3%, compared to expecations of 5.3% at the same time a year ago.
However, earnings actually reported so far during the latest quarterly earnings results season have in some cases beat expecatations that had been lowered previously, the latest Tracker report notes.
Jon Cunliffe, CIO, said: "whilst we are still in the early stages of the fourth quarter earnings season, there is evidence that in the US earnings growth is surprising positively. In addition, the share price of companies which have beaten earnings guidance has, in general, been strongly positive, whilst those companies which have failed to meet expectations have not been punished as severely as in previous quarters."
"However, the trend in European corporate earnings remains particularly weak, mirroring the disappointing performance of the Eurozone economy in recent months. The bar for positive surprises in Europe is now very low, with corporate earnings expected to barely grow in the quarters ahead."
In terms of EuroStoxx companies, the report suggests that earnings growth reported for the final quarter of 2018 is around 1%. For UK FTSE 100 companies that have reported thus far point to earnings growth above 20%.
Click here to read the full Tracker report: