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European Indexes Post Gains

Posted on: Thursday, 26 April 2007, 12:11 CDT

In London, the FTSE 100 [+0.29%]continues to stay higher in late-session trading, helped by energy and mining stocks. UK first quarter GDP rises 0.7% vs expectations of 0.6%. is at US$2.0043. Oil inches up to US$64.90/bbl as traders await US data, expected to show an 11th consecutive weekly fall in gasoline stocks.

In M&A news, the consortium comprising Royal Bank of Scotland [-1.64%], Fortis and Santander unveils a 39/share offer for ABN Amro. Sainsbury [+6.89%] is the top gainer on talk of a dawn raid from an investment fund Three Delta, backed by the Qatar Investment Authority, after a block of about 250 million shares was traded at 5.75/sh this morning. Morrison [+1.15%] gains. Among pharma stocks, GlaxoSmithKline [-0.48%] sees its first quarter pretax profit fall 1% hit by a stronger US$/ exchange rate. However, Shire [+5.98%] raises its fiscal revenue forecast as first quarter sales rise 33%.

Reuters [+0.10%] posts a forecast-beating 6.5% rise in first quarter underlying revenue. However, actual revenue at the financial information and news provider falls 1.1% due to a weaker US$. Lonmin's [-0.12%] first half refined metal sales drop 27.8%, hit by furnace closure. Stocks trading ex-dividend are: Cadbury Schweppes [-0.74%], Centrica [-0.32%], Drax [-1.10%], Northern Rock [-2.36%], Xstrata [-0.44%].

In Paris, the CAC 40 [+0.94%] stays firmly in the black late in the session, with Wall Street expected to open higher ahead of durable goods orders data, following stellar profits from Amazon. SocGen [+2.69%] and BNP Paribas [+0.64%] add 13 index points on news RBS, Fortis and Santander have indicated a price of 39/sh for ABN Amro, some 13% higher than the Barclays offer as of market close yesterday. Michelin [+5.32%] tables first quarter sales of 4.20 billion, +5.5% and above analysts' estimate of 4.15 billion. LVMH [+1.79%] posts better-than-expected first quarter sales of 3.804 billion, +7%.

In broker action, Morgan Stanley upgrades Alstom [+5.46%] to overweight from equal weight. Goldman Sachs upgrades Alcatel Lucent [+1.56%] to buy from neutral - the telecom equipment manufacturer today winning a contract to build Nigeria's first 3G network. Results hurt two blue chip stocks: Air Liquide [-1.85%] reports first quarter revenue of 2.791 billion, up 5.2% year-over-year but below consensus; STM's [-0.66%] first quarter 2007 revenues came in at US$2.28 billion, down 3.7% year-over-year, also below expectations.

Valeo [+2.25%] saw first quarter sales of 2.640 billion, -0.5%; net income of 33 million, +43.5%. Business Objects [-0.57%] posts first quarter sales of US$334 million [+20%] and net income of US$5.58 million vs analysts estimate of US$17.4 million.

In Frankfurt, the Xetra-Dax [+0.75%] remains comfortably above breakeven in late trading Wednesday as bid talk surrounding ABN Amro lifts the European banking sector higher, with Commerzbank [+1.33%] still a prime suspect when it comes to other takeover targets. On the local earnings front, Siemens' [+0.8%] fiscal second quarter numbers topped expectations as Klaus Kleinfeld's future at the helm hangs in the balance as the board votes today on whether to renew his contract amid a widening corruption scandal. Preliminary results show group profit from operations 9% ahead year-over-year at 1.96 billion and net income 12% ahead at 1.26 billion.

Elsewhere, Merck [+3.58%] reported first quarter operating profit of 321.3 million, a touch above expectations, on in-line sales at 2.17 billion. The pharma group expects to markedly reduce its net debt, which stood at 5.5 billion at the end of last quarter, but gave no details as to how exactly. Schwarz Pharma [-0.27%] tabled first quarter net earnings of 3.2 million on sales at 232.1 million.

Wincor Nixdorf [+2.6%] posted first half EBITA of 90 million, up 20% year-over-year, with interim sales at 1.09 billion. The cash machines maker raised its 2006/07 EBITA growth forecast to 15% from 8% and sales forecast to 9% from 6%.

SGL Carbon's [+5.77%] first quarter EBIT beat estimates, coming in 73% higher year-over-year at 57.3 million. The graphite electrodes maker plans to restructure its financing, but rules out a capital hike. Epcos [+7.19%] says its second quarter was better than expected, with sales up 9% q/q and order intake stable.

Source: Business Week

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