By Javi West Larrañaga and Marleen Kaesebier

(Reuters) -The outlook for European corporate health has slightly improved, the latest earnings forecasts showed on Tuesday, despite continued uncertainty over global trade and the European Union preparing for counter-measures against any major U.S. tariffs.

European companies are expected to report a drop of 0.3% in second-quarter earnings, on average, according to LSEG I/B/E/S data. That is slightly above the 0.7% fall analysts expected a week ago.

Forecasts for Europe-wide STOXX 600 company earnings have steadily worsened since U.S. President Donald Trump announced plans for "reciprocal" tariffs in February. Analysts expected second-quarter earnings to increase 9.1% year-on-year right before the announcement, according to the data.

The consensus forecast for second-quarter revenue, on the other hand, has continued to weaken, the LSEG report showed, with analysts now expecting a 3.1% fall versus a 3.0% drop last week. That would be the worst quarterly performance in more than a year.

A year ago, STOXX 600 companies on average delivered a 3.0% increase in second-quarter earnings and a 0.8% drop in revenues.

This earnings season will highlight how Trump's tariff threats are affecting European companies, as many of them scramble to minimise risks and prepare strategies to counter uncertainty.

Italian-listed Stellantis ( STLA ) said on Monday tariffs had already cost the auto group 300 million euros ($351 million) and pharma firm AstraZeneca ( AZN ) announced plans to spend $50 billion expanding in the U.S. by 2030.

Among sectors, the earnings of STOXX 600 technology firms are expected to increase 26.5% in the second quarter, while those of consumer cyclicals - auto, retail and entertainment companies - are forecast to shrink 23.6%, the LSEG data showed.

($1 = 0.8545 euros)