Financials sector earnings to grow 24% in 2012

Financials, industrials, utilities and energy sectors could recover earnings growth in 2012 while IT earnings will suffer, an S&P Capital IQ analyst survey has found.

Financial sector earnings across the S&P Europe 350 dropped by 22% in 2011.

The S&P Capital IQ analyst survey showed earnings in the industrials, utilities and energy sectors are expected to increase by 13%, 10% and 9% respectively.

Corporate earnings across the entire S&P Europe 350 index are forecast to grow by 9.3% in 2012.

Victoria Chernykh, director at S&P Capital IQ, explained “the high expected growth in financial sector earnings is somewhat inflated due to comparisons with a relatively low earnings base in 2011.”

“On the whole, analysts expect cyclical sectors to recover their earnings growth in 2013 while continuing to lower their 2012 earnings forecasts. This implies analysts are optimistic about the future performance of European corporations despite expected recession this year,” she said.

Equity analysts pinpointed potential losses in the information technology sector, set to decline 11%. The healthcare and materials sectors earnings are expected to witness minimal grow of 0.4% and 1.6% over the course of the year.

2013 could bear better tidings for the technology sector. The largest earnings growth in 2012 is anticipated in the information technology sector at 29%, while the slowest earnings growth is predicted in the telecoms sector at 4%.

The S&P Europe 350 Consensus Earnings Report is compiled by S&P Capital IQ’s Global Markets Intelligence team. Individual bottom-up equity analysts contribute corporate earnings forecasts and a mean estimate for each corporation included in the index is calculated.

S&P Capital IQ is owned by McGraw-Hill Companies. It provides multi-asset class data, research and analytics to institutional investors, investment advisors and wealth managers.

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