European companies are heading for their worst quarterly earnings in three years as revenue drops for the first time since early 2018, according to the latest Refinitiv data.

The results will underscore concerns about Europe Inc's deteriorating health.

Companies listed on the STOXX 600 regional index are now expected to report a 2.2% drop in third-quarter earnings per share.

This would be worse than the 1.9% drop expected a week ago and the biggest quarterly fall since the third quarter of 2016, according to I/B/E/S Refinitiv.

Consensus now calls for a drop in revenue of 0.3% in the quarter, which would be the first since the first quarter of 2018, but slightly better than the 0.4% fall expected last week. 

Companies are already suffering a corporate recession after earnings declined in the previous two quarters as the US-China trade war and uncertainty over Brexit crimp demand and Germany, the region's largest economy, at risk of falling into recession.