News & Reports News Year 2011 May , 2011 European stocks climb for second week

European stocks climb for second week

 

5may2011-13

European stocks posted a second weekly gain, with the Stoxx Europe 600 Index completing the biggest monthly increase this year, as companies from Ericsson AB to Volkswagen AG reported better-than-estimated earnings.
Ericsson surged 16 percent as the biggest maker of mobile- phone networks reported first-quarter profit that more than tripled. Volkswagen, Europe’s largest carmaker, jumped 12 percent. Parmalat SpA soared the most in two years as Groupe Lactalis offered to buy the 71 percent of Italy’s biggest dairy company it doesn’t already own.
The Stoxx 600 advanced 1.2 percent to 283.78 this past week, for a 2.9 percent increase this month. The measure has surged 8.2 percent from this year’s low on March 16 as companies from UBS AG to Akzo Nobel NV reported earnings that exceeded forecasts and the U.S. Federal Reserve maintained its pledge to keep interest rates low for an “extended period.”
“There are enough reasons to be positive on equities,” Vincent Juvyns, an equity strategist at ING Investment Management in Brussels, said in an interview on Bloomberg Television. “We see it in the earnings season. There are a lot of reasons to be worried about the macroeconomic context, but at the same time, on the microeconomic level, companies are doing well.”
A report on April 28 showed the U.S. economy grew at a slower pace than forecast in the first quarter as consumer purchases cooled, home construction decreased and government spending declined. Gross domestic product rose at a 1.8 percent annual rate from January through March after a 3.1 percent pace in the last three months of 2010, the Commerce Department said.

Beaten forecasts

Of the 113 companies in the Stoxx 600 that have reported earnings since April 11, 66 have beaten analyst forecasts for per-share profit, according to data compiled by Bloomberg. In the U.S., 77 percent have exceed estimates in the period.
National benchmark indexes rose in all of Europe’s 18 western markets, except Austria and Denmark. France’s CAC 40 gained 2.1 percent, the U.K.’s FTSE 100 Index climbed 0.9 percent, while Germany’s DAX rallied 3 percent.
Ericsson jumped 16 percent, the biggest weekly gain since 2008. The company on April 27 said first-quarter net income surged to 4.1 billion kronor ($674 million) from 1.26 billion kronor a year earlier. Profit beat the 3.06 billion-krona average of 19 analyst estimates compiled by Bloomberg.
A measure of automobile shares rose 5.2 percent, the biggest weekly increase in almost three months and the largest gain among the 19 industry groups in the Stoxx 600.
VW earnings
Volkswagen advanced 12 percent after the automaker on April 27 reported record first-quarter operating profit as the Audi and VW brands attracted more Chinese customers. Earnings before interest and tax more than tripled to 2.91 billion euros ($4.27 billion), surpassing analyst estimates.
Porsche SE increased 11 percent, the largest gain since January. The company’s car-making division reported a first- quarter profit gain after a revamp of the Cayenne boosted demand for the sport-utility vehicle. Earnings before interest and taxes “more than doubled” to 496 million euros, the company said, without providing a year-earlier figure.
Kesko Oyj rose 9.3 percent, the most since July. Finland’s biggest retailer reported first-quarter net income of 25 million euros, beating the 24.7 million-euro mean estimate of eight analysts surveyed by Bloomberg.
Yara, SSAB
Yara International ASA gained 8 percent, the largest weekly gain in almost nine months. The world’s largest publicly traded nitrogen-fertilizer maker reported first-quarter net income of 2.89 billion kroner ($550 million), compared with 1.52 billion kroner a year earlier. That topped the 2.39 billion-krone average of 13 analyst estimates surveyed by Bloomberg. Sales rose to 19.8 billion kroner.
SSAB Svenskt Staal AB jumped 10 percent after the world’s largest supplier of high-tensile steel said first-quarter net income rose to 390 million kronor ($65 million) from 143 million kronor a year earlier. Analysts had estimated net income of 154 million kronor, according to a survey compiled by Bloomberg.
Parmalat increased 11 percent, the biggest weekly advance since February 2009. Lactalis, France’s biggest cheesemaker, on April 26 offered to pay 3.38 billion euros in an unsolicited bid for the 71 percent of Parmalat it doesn’t own to create the world’s largest dairy company.
Micro Focus International Plc rallied 9.9 percent as the U.K. software provider said it received a preliminary, non- binding takeover approach.
Barclays falls
Barclays Plc, Britain’s third-largest bank by assets, dropped 5.5 percent. Pretax profit at its investment banking unit fell 33 percent in the first quarter to 982 million pounds ($1.6 billion) as revenue declined 15 percent, the lender said on April 27. The bank posted a 5 percent fall in overall net income to 1.01 billion pounds which missed the average analyst estimate of 1.21 billion pounds.
Electrolux AB slid 5.5 percent. The world’s second-largest appliance maker said first-quarter net income fell to 457 million kronor from 911 million kronor a year earlier. Analysts on average expected net income of 529 million kronor, a survey showed.