European Profits May Decline 55% From Peak, Goldman Sachs Says

By Adam Haigh

March 31 (Bloomberg) -- Earnings at European companies may drop 55 percent from the peak before recovering “modestly” in 2010, Goldman Sachs Group Inc. equity strategists said.

“This is significantly worse than the 25 percent peak-to- trough fall in the early 1990s and 46 percent in 2001-02,” Goldman Sachs strategists led by Peter Oppenheimer wrote in a report to clients today. “The recovery we expect is lackluster compared with those previous periods, mainly reflecting slow volume growth and low price inflation.”

Profits will decline 38 percent this year and rise 19 percent in 2010, according to the report.

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net.