European indexes closed higher Thursday on strong reported figures. A minor rally on Wall Street and a further dip in crude prices also helped sentiment in Europe. The ECB left interest rates unchanged at 2.5%, as expected. Earlier, the Euro zone’s service PMI index rose slightly to 58.3 in April vs. 58.2 in March.
Germany: The Xetra-Dax index claimed back the 6,000 mark on Thursday, closing 1% higher thanks to strong first quarter results from MAN & BASF (BF). In Frankfurt specifically, BASF's (+2.09%) first quarter sales rose a better-than-expected 24% to €12.5 billion, with pre-exceptional operating profit also topping expectations at €1.9 billion.
MAN (+7.25%) topped the Dax lot today after its first quarter operating profit rose nearly 80% to €215 million, ahead of expectations by a wide margin. Continental's (+0.24%) first quarter EBIT rose 25.5% to €352.4 million on quarterly revenue 11% higher year-over-year at €3.61 billion, both better than expected. Elsewhere, rumors had it that SBC Communications wants to buy 8% of Deutsche Telekom's (DT)(+0.95%) stock.
Broader market-listed Epcos (+5.24%) saw its second quarter EBIT come in at a better-than-expected €12 million. Quarterly sales of €324 million also beat expectations. The chip maker is optimistic about its business outlook.
Douglas's (-1.47%) second quarter loss from ordinary activities widened to an expected €4.3 million. GPC Biotech (GPCB) (+2.23%) saw its first quarter loss widen to €12.9 million from €12.4 million in the red for the same quarter a year ago as research expenses dented the bottom line. Quarterly sales jumped 187% to €5.4 million.
France: The CAC 40 index ended the session in fine fettle (+0.77%), with the index up 39.7 points, of which 11 could be attributed to Total (TOT) (+1.69%) after the oil giant's better-than-expected results. Suez (SZE) (+2.60%) also released consensus-beating revenue figures, adding another 5.7 points to the benchmark index. Total shrugged off the fall in WTI, after first quarter net profit pleased with a 16% rise to €3.376 billion.
Suez first quarter revenues grew by 14.3% to €11.8 billion, also beating forecasts. The company said it expected €1.1 billion in annual merger synergies from its alliance with GdF (+1.13%), vs. their initial €1 billion forecast. Accor (+3.14%) climbed along with European peers after a Times article speculated that UK 's Intercontinental (IHG) was targeted by a private equity group.
Conversely, Publicis (-1.01%) fell as first quarter organic growth of 6.3% fell short of 7.2% forecasts. Dassault Systemes's (+1.66%) first quarter EPS came in at €0.34 million, +26%, but the group lowered fiscal year EPS forecasts. Soitec (+8.77%) soared on the back of an article claiming Dell (DELL) was looking at sourcing chips from AMD (AMD), one of Soitec's largest clients.
UK : The FTSE 100 index closed higher, led by oil, miners and banks. Oil shares gained, despite falling crude prices, after better-than-expected numbers from Royal Dutch (RDS) (+0.05%) and France's Total. BP (BP) (+0.59%) added 2.9pts to the FTSE. The pound hit an 8-month high vs. the US$ after the ECB said investors could expect a June rise. The Bank of England also left interests unchanged at 4.5%.
At home, Unilever (UL) (-2.60%) took a knock on disappointing first quarter organic growth. AstraZeneca (AZN) (-0.71%) slid after it discontinued a diabetes treatment development program. ICI (+7.03%) jumped on the back of a strong first quarter report.
Intercontinental (IHG)(+5.87%) gained amid talk of Permira bid interest. Standard Chartered (+0.76%) said underlying business was doing well. British Airways (BAB) (+2.06%) said its April load factor was 78.7%.
Rentokil's (+2.44%) first quarter performance, although down year-over-year, was in line. Trinity Mirror (+1.34%) reported like-for-like revenues down 11.8% in the first four months of 2006 amid assumptions that the advertising environment will remain challenging. Hammerson (+1.69%) announced plans to elect REIT status from 2007. M&B (-4.26%) rejected Tchenguiz's £2.7 billion approach.
Elsewhere: Nordic indices were markedly higher at the close on Thursday. Oslo stormed ahead following a stellar report from Telenor (+9.72%), which added almost 3pts to the index. The telco topped market estimates in the first quarter and revised its fiscal year outlook. Pretax profit came in at NOK5.9 billion on sales up 43% year-over-year (+15% underlying) to NOK21.9 billion. Going forward, Telenor now sees sales growing 30% year-over-year in fiscal 2006, with high EBITDA growth and EBITDA margin over 34%. Petroleum Geo. Services (+14.17%) added a further 1.8pts to the OSE after revealing better-than-expected first quarter profits and increasing its fiscal year EBIT margin forecast to 40% from 30% previously estimated and vs. 20% in the previous year. Stockholm was the weakest index, but still managed 0.44% gains.
Holly Cook, Pawan Girglani, Julien Manrique, Mariella Mongio, Rocio Opazo-Aniotz, Guarav Panchal, Michael Sanderson, Emma Stevenson, Valerie Vidal; Alex Halperin (BusinessWeek Online)
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