American corporations have achieved record-breaking profits in the most recent fiscal year, significantly outpacing their European counterparts. Calculations from the Handelsblatt Research Institute reveal a combined profit of €1.3 trillion for the 500 largest publicly traded companies in the United States – a 1.5% increase year-on-year and the highest level ever recorded.
A substantial portion of this success originated from the technology sector, with Apple, Alphabet (Google), Amazon, Meta, Microsoft and Nvidia contributing €441 billion, representing nearly one-third of the total American profits.
In contrast, the 500 largest publicly traded companies in Europe witnessed a 5% decline in profits, totaling €616 billion. This divergence widened further in the first quarter of the current year, when American companies saw a 17% increase in net profits compared to the previous year, while European companies experienced a 9% decrease.
Analysts attribute this disparity, in part, to the strengthening of the US dollar. The euro has appreciated by 13% against the dollar since the beginning of the year, creating headwinds for European companies competing in the dollar-denominated market. The conversion of earnings back into euros further diminishes their reported value.
Looking ahead to the full year, analysts are projecting an average profit increase of nearly 16% for US corporations, compared with just 5.5% for their European counterparts.
