Barclays said its analysis of the current first-quarter earnings season points to the strongest EPS growth in years for both sides of the Atlantic, with the United States showing the more pronounced advance.
On a blended basis, Barclays reports earnings-per-share growth running at 27% in the US and 7% in Europe. Those blended rates would represent the most robust performances since Q4 2021 in the United States and since Q1 2023 in Europe. Looking at companies that have already released results, EPS growth is tracking at about 16% for US firms and about 4% for European firms.
European companies, Barclays finds, have generally delivered earnings beats in line with expectations. However, forward-looking commentary from those firms has tended to be cautious. Barclays' review of company transcripts indicates that roughly 75% of reported European firms are experiencing impacts from the ongoing conflict - manifested as weaker demand, supply chain disruption or higher input costs - and that caution is reflected in guidance.
Revisions to full-year 2026 EPS projections have diverged across regions. In the United States, Barclays observes that FY26 EPS revisions have turned positive, with lifts driven primarily by the artificial intelligence and broader technology sectors. That improvement has widened the gap versus European estimates. Energy and semiconductor companies have registered the largest upward revisions in both the US and Europe, helping to lift FY26 EPS growth forecasts overall.
Sector-level performance is mixed. Barclays highlights that Financials, Materials and Consumer Discretionary delivered notable earnings beats, while Technology and Consumer Staples were leading categories within the United States. Most other sectors recorded only modest downgrades, with the majority of cuts concentrated in consumer-oriented segments such as luxury goods, automotive and leisure.
At a macro revision level, global EPS adjustments have begun to stabilize as recent data points and activity indicators - including global purchasing managers' indexes - have ticked higher. Barclays cautions, however, that the pick-up in resilient economic and activity data appears concentrated in the United States, while European EPS revisions remain slightly negative.
Contextual note: The findings reflect Barclays' compilation and analysis of results and company commentary during the current reporting season.