European first-quarter corporate profits seen rising 2.3%, up from last week's estimate

By Marleen Kaesebier and Javi West Larrañaga

May 20 (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 2.3% in first-quarter earnings, on average, according to LSEG I/B/E/S data. That exceeds the 1.9% increase analysts had expected a week ago.

Some 60.1% of the 271 STOXX 600 companies have already posted first-quarter earnings that beat analysts' expectations.

Consensus forecasts for first-quarter revenues are unchanged from last week, with a 2.3% increase expected.

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

Around U.S. President Donald Trump's inauguration on January 20, forecasts were for a 3.5% increase in first-quarter earnings, according to LSEG data. Expectations reversed to a drop of as much as 3.5% following his April tariff announcements.

After the relief of a 90-day tariff pause announced last week, investors await trade deals before Trump's reciprocal tariffs are set to kick in again in early July.

Economic uncertainty and prospects of trade tensions continue to hit companies' outlook, an Allianz Trade global survey showed on Tuesday. Some 42% of companies now expect a marked decline in export revenues, versus only 5% before Trump's tariff announcements on April 2, which he calls "Liberation Day".

Among European companies reporting this week was British telecoms giant Vodafone VOD.L, which on Tuesday posted adjusted core earnings roughly in line with its target.

As of Tuesday's close, the Europe-wide STOXX 600 index was up about 9% year to date, near nine-week highs, in a remarkable recovery since April 2, when trade uncertainties erased almost all of its gains since January.

Results of companies including JD Sports JD.L this week will showcase how some of the last European companies are faring in the first quarter amid market uncertainties.