European Stocks Climb as Telecom Italia, Eiffage Advance
Saturday, 25 February 2012 | 00:00
European stocks climbed, snapping a three-day drop for the Stoxx Europe 600 Index, as companies from Telecom Italia SpA (TIT) to Eiffage SA said they will cut their debt in 2012 and house sales in the U.S. beat economists’ estimates.
Telecom Italia, the country’s biggest phone company, advanced 6.8 percent. Eiffage jumped 16 percent after the company also predicted higher profit. SAP AG (SAP) gained 1.5 percent after announcing an 83 percent increase in its dividend. Cove Energy Plc rallied after receiving an offer from PTT Exploration & Production Pcl (PTTEP) for the company.
The Stoxx 600 (SXXP) rose 0.3 percent to 264.83 at 4:30 p.m. in London as more than two stocks climbed for every one that dropped. The gauge has still fallen 0.4 percent this week. The Stoxx 600 (SXXP) slid for a third day yesterday after the European Commission warned that the euro area’s economy will shrink this year, dragged down by Italy and Spain. The gauge has climbed 8.3 percent so far this year buoyed by U.S. economic reports that topped forecasts.
“European fourth-quarter earnings have been very mixed so far,” said Ioan Smith, a director at Knight Capital Europe Ltd. in London. “A very small percentage have beaten top- and bottom-line estimates whilst offering better guidance. Given the weak macro backdrop, it appears many have adopted conservative stances.”
National benchmark indexes advanced in 13 of the 18 western-European markets. Germany’s DAX Index gained 0.8 percent, while France’s CAC 40 Index rose 0.7 percent. The U.K.’s FTSE 100 Index slipped less than 0.1 percent.
U.S. House Sales
A U.S. Commerce Department report showed that January new- home sales reached 321,000, higher than the 315,000 median estimate of 77 economists surveyed by Bloomberg.
Ten companies on the Stoxx 600 (SXXP) were scheduled to report financial results today. Of the 212 that have reported quarterly earnings so far, 108 have missed analyst estimates, while 92 have beaten them, according to data compiled by Bloomberg.
Telecom Italia jumped 6.8 percent to 86.7 euro cents after the company forecast a bigger-than-estimated reduction of debt this year, as well as stable earnings and revenue. Full-year earnings before interest, taxes, depreciation and amortization climbed 7.3 percent to 12.25 billion euros ($16.4 billion), inline with analysts’ estimate of 12.3 billion euros.
Eiffage (FGR) surged 16 percent to 29.51 euros after Chief Executive Officer Pierre Berger said the French builder’s net income and revenue will climb in 2012 as it improves the operating margins at its contracting units. The company plans to trim its debt by 2 billion euros in five years. Natixis upgraded the shares to “buy” from “neutral.”
SAP Shares Climb
SAP advanced 1.5 percent to 50.29 euros after the biggest maker of business-management applications said its executive board has recommended an 83 percent increase of its dividend after a record year.
Part of the proposed 1.10 euro payout is a 35-cent one-off dividend to mark SAP’s 40th anniversary, while the regular dividend will increase by 25 percent. If approved, it would cost 1.3 billion euros, the company said late yesterday.
Cove Energy Plc (COV) surged 21 percent to 235 pence after PTT Exploration & Production offered 1.1 billion pounds ($1.8 billion) to buy the U.K. explorer focused on East Africa, trumping an earlier bid by Royal Dutch Shell Plc.
The proposed offer of 220 pence a share represents a premium of 30 percent to Cove’s average closing price in the past five days, Thailand’s only listed oil and gas explorer said today in a statement.
Lloyds, Brenntag Fall
Elsewhere, Lloyds Banking Group Plc (LLOY) slid 2.3 percent to 35.73 pence, paring yesterday’s 3.3 percent advance. The shares fell after the lender’s full-year net loss widened to 2.8 billion pounds from 320 million pounds for 2010 as the bank compensated customers who were mis-sold loan insurance. That fell short of the 2.41 billion-pound median analyst estimate.
Brenntag AG (BNR) retreated 3 percent to 84.15 euros after Brachem Acquisition S.C.A. sold seven million shares in the German chemical distributor, more than the five million that it initially planned. Brachem sold the stock at 82.50 euros apiece.
Aberdeen Asset Management Plc (ADN) fell 2.2 percent to 247.3 pence after Canaccord Genuity and Singer Capital Markets sold about 55 million shares in the fund manager, two people familiar with the sale said. The stock was offered at 240 pence apiece.
Bekaert NV plunged 8.7 percent to 24.72 euros for the biggest decline on the Stoxx 600 (SXXP). The world’s largest maker of steel cord used in tires said planned cost cuts won’t restore margins before 2014 following a collapse in sawing-wire prices and increased competition from Asian manufacturers.
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