Europe Earnings Pounded by China Exposure

Tomohiro Ohsumi | Bloomberg | Getty Images

In the first big day of earnings in Europe there was one word on every CEO's lips: China.

In the past, this may have signaled healthy margins and headstrong strategies as companies diversified away from a struggling European economy -- but today, the word has become synonymous with fears of a slowdown in emerging markets.

"Near-term uncertainty over China is a concern," Borje Ekholm, CEO of Investor AB, one of Sweden's largest investors, told CNBC on Thursday. "They are clearly moving away from an export driven model to a domestic consumption model. How that is going to play out, I think, is still surrounded in uncertainty."

(Read More: The long game: Why a China slowdown isn't scary)

The impact of this is so uncertain that it is hard to predict how Asian countries surrounding China will be affected, he said. The global arbitrage model – when jobs move overseas to where labor is cheapest - is "breaking down," Ekholm said, adding that he sees a resurgence of manufacturing in North America and possibly even Europe.

"China is a worry," Peter Gleissner, managing director of Intel Europe, told CNBC on Thursday, adding that there were now bright spots in Europe the firm could take advantage of. "Certainly emerging markets are not performing at the level we are expecting them to perform."

It was a similar story at fellow technology companies Ericsson and SAP, whose shares both took a nosedive after reporting second-quarter results on Thursday.

Ericsson cited a challenging second quarter following continued structural decline in systems investments in China, which makes up 4 percent of the firm's revenue, down from 6 percent last year. While the company said its Japanese and U.S. markets had remained steady.

German firm SAP said it had cut its outlook for its software revenue this year as a result of the Chinese slowdown, but co-CEO Jim Hagemann Snabe was confident that any effects on the company would be temporary.

(Read More: Why China's slowdown spells trouble for Europe)

"I think it's a short-term slowdown because when I speak to customers they all talk about how they need to advance their business, be more global and use technology to be more efficient," Hagemann Snabe told CNBC on Thursday.

This was echoed by Ton Buchner, CEO of Dutch paint maker AzkoNobel, who said the group was stepping up its cost reduction plans. Shares plunged 7 percent in Thursday's session after the company reported second-quarter results.

"We see a clear, distinct development in two parts of China," Buchner told CNBC. "In the domestic market we still see growth - and quite significant growth. Whereas in the export markets - where we are also supplying a lot to - we see significant negative impacts."

China's gross domestic product (GDP) slowed in the second quarter to 7.5 percent year-on-year, down from 7.7 percent in the first three months of the year. It followed disappointing import data, which missed expectations by a wide margin last week, to decline 0.7 percent year-on-year in June, against a forecast rise of 8 percent.

A number of analysts now expect China's economy to continue to slow significantly, with Societe Generale predicting that GDP could sink to between 4-5 percent in seven years' time.

(Read More: China slowdown weighs on tech giant SAP)

But some are more bullish on the country's outlook, and a number of investors are opting to ignore consensus, seeing it as a contrarian play.

James Emmett, global head of trade and receivables at HSBC, told CNBC on Wednesday that the country is moving from "unsustainable" double-digit growth to more stable growth, and investors should see this as a "long-term play".

China's domestic consumption also remains "resilient", according to an International Monetary Fund (IMF) report on the country, released on Wednesday. The IMF forecast China's economy to grow by 7.75 percent this year, but stressed the need for critical reforms.

Follow us on Twitter: @CNBCWorld