European companies’ third-quarter earnings outlook has improved, with STOXX 600 companies expected to report average profit growth of 21.9%, according to the latest LSEG forecasts. The estimate, based on results from 47 companies and market expectations for those yet to report, is up from 20.7% a week earlier and would represent the second-best growth rate in four years. Energy majors are expected to lead the increase, with earnings forecast to rise 134.1% from a year earlier as their trading desks benefit from volatility and disruption caused by the US-Iran war. Excluding energy, average earnings growth is projected at 8.4%. Revenue growth for European blue-chip companies is also expected to reach 13.3%, the strongest rate since the third quarter of 2022. However, higher oil prices and rising government borrowing costs could make it harder for companies to satisfy investors concerned about a renewed euro zone debt crisis.