Europe’s fourth-quarter earnings season is still early, but the continent’s largest companies are mostly making progress.
Novo Nordisk NVO,
the maker of wildly popular weight-loss drugs beat estimates on Wednesday and provided an outlook that suggests analysts will have to raise their outlook further. LVMH Moët Hennessy MC,
the luxury giant reported faster-than-expected sales growth and surprising cost control. ASML Holding ASML,
The maker of microchip manufacturing equipment has seen faster-than-expected order growth even as its exports are hampered by the technology wars between the United States and China. SAP SAP,
The German database provider, Oracle’s arch-rival, boosted its profit outlook.
There were, of course, some outliers: Novartis NVS,
for example, disappointed, but it was a strong quarter for major European companies.
If there’s one thing these different makers of injectable drugs, handbags and lithography systems have in common, it’s that none of them depend on Europe for sales.
More than half of Novo Nordisk’s sales came from the United States, with all of Europe, the Middle East and Africa accounting for just over 20%. LVMH’s regional distribution is more balanced, although the European share of 25% is flattered by sales to Asian tourists visiting Paris. Last year, only 4% of ASML’s shipments were destined for Europe, the Middle East and Africa.
Of course, Europe’s largest companies have long adapted to the continent’s stagnant economy. This was highlighted this week by data showing the eurozone economy grew just 0.5% last year, compared to 2.5% in the United States. Over a longer time frame, the US economy has outpaced the Eurozone’s GDP by more than 20% since the turn of the century. .
Market-cap-weighted European earnings surprised 2% to the upside, according to Goldman Sachs. By contrast, an equally weighted look at European earnings shows a loss of 1%.
The smallest 200 of the Stoxx 600 XX:SXXP index posted a 5% loss, which Goldman partly attributes to “high domestic exposure.”