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As the first-quarter earnings season of 2025 approaches, investors face significant uncertainty, largely due to the impact of U.S. President Donald Trump’s tariffs.
The duties introduced in April and the ensuing fluctuations in policies have surpassed even the most pessimistic expectations among market analysts.
Currently, discussions are underway between negotiators from the European Union and the United Kingdom with U.S. officials to mitigate the blanket tariffs of 25% and 10%. At the same time, they are addressing broader tariffs impacting steel, aluminum, and automobiles. The global community is closely monitoring the ongoing tensions between Washington and Beijing, hoping for a cooling of relations that might prevent a trade war with extensive consequences.
Recent earnings reports from two major firms in Europe have set the stage for what investors might anticipate going forward.
The luxury conglomerate LVMH indicated that its sectors, including beauty and wines, might experience reduced spending from “aspirational clientele.” In a similar vein, Dutch semiconductor company ASML expressed concerns that the tariffs were introducing a new layer of uncertainty regarding demand. However, neither company was able to specify the exact impact of these tariffs on their financial results.
Maersk
Maersk, the Danish shipping leader and a strong indicator of global trade, is set to report its first-quarter earnings on May 8. The company’s stock has experienced significant fluctuations in recent weeks, influenced by the ongoing tariff announcements from the Trump administration.
The potential escalation of a trade conflict between the U.S. and China—a significant concern for the shipping and transportation industry—continues to loom large. Analysts predict that Maersk’s earnings before interest, taxes, depreciation, and amortization (EBITDA) will drop to $2.3 billion for the quarter, down from $3.6 billion recorded at the end of 2024.
Earlier this month, Maersk characterized the U.S. tariffs as “significant,” emphasizing their detrimental effects on global economic stability and trade. “The timeline for how this situation will unfold remains uncertain,” the company noted in its April 3 statement, highlighting the need to observe how countries respond, negotiate, and potentially impose counter-tariffs.
Shell
Shell is expected to share its first-quarter earnings on May 2, following its announcement in March about increasing shareholder returns, cutting costs, and focusing on liquefied natural gas (LNG).
In a more recent trading update, Shell revised its LNG production forecasts downward due to unexpected maintenance issues in regions like Australia. The volatility in the oil and gas sector has intensified, exacerbated by fears of a recession, dwindling oil demand, and decreasing crude prices.
Analysts from Hargreaves Lansdown highlighted that, while Shell’s emphasis on efficiency positions it well for increased cash flow and shareholder distributions, it remains vulnerable to fluctuations in oil prices. The consensus anticipates adjusted earnings of $5.14 billion for Shell in the first quarter, a decline from $7.73 billion in the same timeframe a year prior.
Volkswagen
Volkswagen, the German automotive powerhouse, is among the many car manufacturers bracing for the impact of tariffs, particularly those affecting imports from Canada and Mexico. The company’s earnings report slated for April 30 is expected to clarify the anticipated effects of the tariffs on its Chattanooga, Tennessee operations.
In April, the U.S. imposed a 25% tariff on imported cars, which has already incited consumer buying panic. CFO Arno Antlitz previously stated that while Volkswagen supports free markets, the firm already feels “like an American company” due to its extensive U.S. workforce.
However, experts caution that these tariffs could be particularly detrimental for German manufacturers that export significant numbers of vehicles to the U.S., especially since many cars still rely on European-sourced components. Volkswagen’s revenues for the first quarter are expected to climb to 77.6 billion euros ($88.2 billion), although earnings before interest and taxes (EBIT) are projected to decrease to 4.03 billion euros.
Lufthansa
As global geopolitical tensions rise, there are concerns regarding the potential decline in travel demand, and the results from German airline group Lufthansa, expected on April 29, may provide insights into this concern.
Lufthansa CEO Carsten Spohr previously predicted a notable increase in profits for 2025, citing robust transatlantic bookings. However, recent developments, particularly surrounding Trump’s tariffs and public sentiment, may complicate the travel landscape.
Data from the International Trade Administration revealed a 17.2% year-on-year drop in visitor arrivals from Western Europe to the U.S. in March, starkly contrasting a 17.7% increase from the Middle East.
Lufthansa Group, which encompasses several airlines including SWISS and Austrian Airlines, faces numerous challenges such as labor strikes, rising global prices, and delays in Boeing aircraft deliveries. Analysts estimate that the group will report first-quarter revenues of approximately 8.07 billion euros, up from 7.4 billion euros last year, but will still experience a loss of around $630 million in EBIT, an improvement from a $871 million loss a year prior.
Novo Nordisk
The pharmaceutical sector, particularly drugmakers, remains uncertain about how their access to the crucial U.S. market may be affected in the months ahead.
Recent announcements from the Trump administration hint at an investigation into the national security implications of importing certain pharmaceuticals, which many consider a precursor to potential tariffs on drugs. The timeline and specifics of such tariffs remain unclear.
For Novo Nordisk, one of Europe’s largest listed firms, the uncertainty poses a threat to its U.S. sales of key products such as the popular diabetes and obesity treatments, Ozempic and Wegovy. The company’s results on May 7 will be closely scrutinized for insights on how it is preparing for this evolving scenario and whether its substantial manufacturing base in the U.S. can mitigate any negative effects.
Market experts note that inquiries about the implications of tariffs are leading discussions among investors, reflecting rising anxiety over the evolving trade landscape.
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