Updates prices and details throughout; adds analyst comment

By Tharuniyaa Lakshmi and Johann M Cherian

July 14 (Reuters) - European shares were near one-week lows on Tuesday, as escalating U.S.-Iran tensions spooked investors, who scrutinized quarterly earnings from companies such as oil major BP and telecom equipment maker Ericsson to gauge the impact of the conflict on corporate health.

The pan-European STOXX 600 index .STOXX slipped 0.7% to 636.52 points by 0835 GMT. Travel and leisure .SXTP fell 2.6% and led a broad-based sectoral slide. Energy price-sensitive airlines Air France AIRF.PA and Lufthansa LHAG.DE fell more than 2% each.

Brent crude prices LCOc1 shot up 3% to $85 a barrel after the U.S. carried out a third straight night of strikes against Iran and President Donald Trump announced a blockade of Iranian shipping and a 20% fee on cargo transiting the Strait of Hormuz.

The move is the latest complication that companies and investors will have to consider as they gauge the health of the economy and corporate outlook for the rest of the year, just weeks after a Mideast agreement seemed to end hostilities.

"The optimism that was there in markets has been given a nasty check because of the resumption of possibilities and the worry that this is going to be a replay of something like what we had in March," said Chris Beauchamp, chief market analyst at IG Group.

Ericsson ERICb.ST tanked 8% after the Swedish telecom equipment maker's quarterly sales slightly missed estimates and it warned of rising component costs.

On the flip side, London's BP BP.L benefited from the surge in oil prices earlier this year. Shares of the oil company rose 1.6% after it said its oil trading results are expected to be slightly higher in the second quarter.

Inflation concerns prompted investors to ramp up bets on the likelihood that the European Central Bank will hike interest rates by at least one more 25 basis points by as early as September, LSEG-complied data showed.

European shares have also been bogged down by concerns about tech sector valuations. Tech giant ASML's ASML.AS results later this week could offer clues on the outlook for AI-driven demand.

Later in the day, the focus will shift to big U.S. bank earnings, a U.S. inflation report and commentary from Federal Reserve Chair Kevin Warsh that could offer insights into the health of the world's largest economy.

Among others, Evotec EVTG.DE plummeted 30% after the drug discovery firm cut its 2026 outlook.

Mycronic MYCR.ST surged 13% after the electronics equipment maker raised its full-year guidance on strong AI demand.