The relentless slide in the euro is proving a major boost to European earnings after years of stagnating profits, just when US results start to lose steam.
As Europe's earnings season draws to an end, companies have reported a 15.9% surge in fourth quarter profits.
This is the biggest rise in European earnings since mid-2011 and well ahead of a 6.8% rise in US quarterly profits - with European firms starting to reap the benefits from a lower currency.
The euro has fallen by about 25% against the dollar over the past year. This is set to give a major lift to European companies as roughly 50% of euro zone earnings are coming from outside the region.
Analysts said that the weakening of the euro is a tailwind for most of Europe's corporate world. They said that earnings expectations for Europe have been very low.
But the current weakness of the euro versus the dollar could continue for quite an extended period of time, and this will prompt investors to upgrade their earnings forecasts not only for 2015, but also for 2016 and 2017 as well.
Strategists have said a drop of 10% in the euro versus a basket of currencies will translate into a 6-8% rise in European profits. With the euro down 16% against the other currencies, profits are poised to get a 10-13% boost.
The single currency has been retreating on prospects of a quantitative easing campaign from the European Central Bank, which was launched earlier this week, contrasting with the trajectory of monetary policy in the US where the Federal Reserve is seen raising interest rates in mid-2015.
With the dollar on the rise, a number of US bellwethers, including the world's second biggest personal computer maker Hewlett-Packard, have started to warn on the potential negative impact from exchange rates.
According to data from Thomson Reuters I/B/E/S, US corporate outlooks for the first quarter have been negative.
The growing divergence in European and US earnings is starting to show up in analyst forecasts.
European profits are seen rising about 5% in 2015, a relatively low figure due to the steep drop in profits seen for oil companies, while US profit growth is seen grinding to an halt this year, up 1.6%, data shows.
This makes the differential in favour of European profit growth the widest in six years.
European earnings are set to improve even more later in the year as the benefits of the lower euro, as well as lower oil prices, has not yet been felt by many companies, analysts said.
