Specifically, a recent
analysis by Graham Secker, MS & Co.'s European
equity strategist, found that recent disappointments in European corporate profits are a function of at
least three important factors that may be reversing: idiosyncratic issues related to heavily skewed index exposure to financials and commodity - linked industries; weak operating profit leverage linked to declining emerging market sales; and less aggressive use of buybacks, tax optimization and non-operating cost reductions versus U.S. peers.