01-05-2017, 12:08 AM
And what happened to European earnings??
The lack of earnings growth from European companies does not appear to be a top-line issue. Both real GDP and sales have recovered to levels now exceeding prior-cycle highs. Earnings, however, are still languishing near prior-cycle lows (Figure 5). In fact, remarkably European companies have broadly kept pace with their US counterparts on sales over the previous five years (Figure 6). Yet the gap in earnings to the US is still at multi-decade highs. Both charts suggest that the poor performance on earnings is not a top-line issue.