European first-quarter corporate profits seen rising 1.9%, up from last week's estimate

By Marleen Kaesebier

May 13 (Reuters) - The outlook for European corporate health has improved, the latest earnings forecasts showed on Tuesday.

European companies are expected to report a rise of 1.9% in first-quarter earnings, on average, according to LSEG I/B/E/S data, better than the 0.4% rise analysts expected a week ago.

The improvement comes after 59.6% of the 230 STOXX 600 companies that have already reported first-quarter earnings exceeded analysts' expectations.

At the time of U.S. President Donald Trump's inauguration in January, the forecasts were for a 3.5% increase in first-quarter earnings, according to LSEG data, but that reversed to expectations for a drop of as much as 3.5% following Trump's April tariff announcements.

Global stocks rallied after news at the weekend of a temporary 90-day tariff de-escalation between the U.S. and China in their ongoing trade war.

Consensus forecasts for first-quarter revenues have also jumped from last week, with a 2.3% increase now expected compared with an increase of 1.9% expected last week.

This compares with a drop of 3.3% in earnings and a drop of 4.6% in revenues a year ago, the data showed.

European companies reporting first-quarter earnings this week have included Poland's biggest bank PKO BP PKO.WA, which posted a 20.8% year-on-year rise in net profit, and Germany's Bayer BAYGn.DE, which reported a smaller decline in adjusted earnings than investors had feared.

Of the countries represented on the STOXX 600 index, Poland and Denmark have the highest estimated earnings growth rates, at 36.8% and 18.9% respectively, while Finland and Portugal have the lowest, according to the LSEG I/B/E/S report.

The Europe-wide index has risen around 7% so far this year.

Results from companies including German utility E.ON EONGn.DE, luxury goods group Richemont CFR.S and French energy firm Engie ENGIE.PA are due later this week.