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European equity markets traded lower on Thursday as investors worked through a heavy slate of quarterly corporate results while remaining cautious amid elevated geopolitical tensions.
By 03:02 ET (08:02 GMT), Germany’s DAX fell 0.3%, France’s CAC 40 slipped 0.2%, and the U.K.’s FTSE 100 declined 0.2%, reflecting a broadly risk-averse tone across the region.
Earnings Season Remains in Focus
It was another busy day for corporate earnings in Europe, rounding out what has been a broadly constructive reporting season. Around 60% of European companies have beaten earnings expectations so far, above the long-term average.
French spirits maker Pernod Ricard (EPA: PERP) reported a 5% year-on-year decline in second-quarter like-for-like sales, as weak consumer demand and ongoing destocking in the United States and China continued to weigh on performance. The contraction, however, eased from the 7.6% drop recorded in the first quarter, supported by improving trends in India and global travel retail.
Mining giant Rio Tinto (LON: RIO) posted flat underlying earnings for 2025, as stronger copper and aluminium volumes and tighter cost controls helped offset the impact of lower iron ore prices.
Renault (EPA: RENA) reported a net loss of €10.93 billion for 2025 after booking a €9.3 billion non-cash charge related to a change in the accounting treatment of its stake in Nissan. Excluding the one-off impact, the French automaker’s operating performance remained resilient, with revenue rising 3%.
Nestlé (SIX: NESN) posted a 17% decline in annual net profit and a sharp margin contraction in 2025, as restructuring costs, asset write-downs, and the fallout from a December infant formula recall weighed heavily on results.
In contrast, Zurich Insurance (SIX: ZURN) delivered a record operating profit of $8.9 billion for 2025, up 14% from the previous year. The strong performance was driven by improved underwriting in its property and casualty business and solid growth across all three operating segments.
Elsewhere, Airbus (EPA: AIR) reported a modestly stronger fourth-quarter profit but warned that aircraft deliveries in 2026 are likely to fall short of expectations due to ongoing engine shortages.
Air France–KLM (EPA: AIRF) reported its first-ever operating result above €2 billion, as revenue growth and lower fuel costs more than offset rising airport charges and labor expenses.
German packaging equipment maker Krones (ETR: KRNG) exceeded analyst expectations on fourth-quarter profitability, although revenue came in slightly below forecasts, as the company continued to deliver profitable growth despite a challenging macroeconomic backdrop.
Geopolitical Tensions Remain Elevated
Beyond earnings, geopolitical developments continued to weigh on investor sentiment. Ukrainian and Russian negotiators held their third U.S.-mediated meeting of 2026 this week, but talks failed to yield progress on key issues, particularly territorial disputes. Russia continues to demand that Ukraine withdraw from the remaining 20% of the eastern Donetsk region not under Russian control—an outcome Kyiv has firmly rejected.
Tensions also remain high in the Middle East. Nuclear talks between the United States and Iran in Geneva made little headway, with U.S. Vice President JD Vance saying Washington was weighing whether to continue diplomatic efforts or pursue alternative options.
Adding to concerns, satellite imagery suggests Iran has recently constructed a concrete shield over a new facility at a sensitive military site and covered it with soil, a move analysts say advances work at a location reportedly struck by Israel in 2024.
Taken together, the combination of mixed corporate results and unresolved geopolitical risks kept European markets on the defensive, with investors remaining cautious about near-term direction.
