It looks like Europe may be making a comeback despite the apparently never-ending fiasco in Greece. According to an August 3rd report from Barclays Equity Research, business is picking up across Europe as the “Euro QE” easy money policies from the ECB are leading to increased spending by consumers and enterprises.

The second quarter earnings season is more than half over, and Barclays notes that the earnings numbers have been good so far. That said, despite the fact that the median stock has topped EPS estimates by more than 3.6%, a few key sectors have had less than stellar results, and that is keeping a lid on investor excitement and equity prices.

European Earnings

Second quarter European revenue, earnings looking strong

The Barclays report highlights that the second quarter earnings season is shaping up positively. Given somewhat more than half of the companies in the STOXX 600 have reported to date, it is encouraging to note that 76% of the firms have beaten or are in line with revenue estimates, and a solid 73% have met or exceeded consensus analyst earnings per share estimates.

European Earnings

Of note, the median STOXX 600 stock topped EPS estimates by a margin of 3.6%, notably above the 1.4% beat seen in the first quarter. Sector-wise, Autos and Staples have had a tough earnings season so far, largely because Emerging Market worries are hurting investor sentiment. Dennis Jose and team point out that the Financials, Media, Energy, Cap Goods, Telecoms and Technology sectors have all reported strong results to date.

European earnings growth is picking up

European Earnings

Of interest, the Euro Area firms reporting to date have grown earnings by an impressive 17% in the second quarter, a good bit faster than the 11% growth clip seen in the first quarter. In addition, the powerful uptrend in M1 money supply augurs that Euro Area GDP and earnings growth figures are likely to continue improving over the rest of the year. Jose and colleagues go so far as to say that earnings growth could accelerate to 26% by the end of 2015. Not surprisingly given the current “easy money” conditions, the Financial sector is leading the recovery in earnings.

European Earnings