Bloomberg News

European Stocks Climb on Corporate Earnings, China Manufacturing

October 24, 2013

Daimler's Mercedes-Benz automobile

A Mercedes-Benz F125! concept automobile, produced by Daimler AG, stands on display at the 65th Frankfurt International Motor Show in Frankfurt. Daimler may be active after reporting third-quarter earnings that topped analysts’ estimates. Photographer: Jason Alden/Bloomberg

European stocks advanced as companies from ABB (ABBN) Ltd. to Daimler AG posted earnings that beat estimates, while a report showed China’s manufacturing strengthened this month more than forecast.

ABB climbed 5 percent after saying profit rose 10 percent amid increasing orders in China and Germany. Daimler added 3.3 percent after also saying sales of its CLA compact coupe and upgraded E-Class sedan rose. Celesio AG jumped 5.4 percent after McKesson Corp. agreed to buy the German drug wholesaler for 3.9 billion euros ($5.4 billion). Credit Suisse Group AG lost 2.8 percent after posting profit that missed analysts’ estimates.

The Stoxx Europe 600 Index increased 0.4 percent to 320.38 at the close of trading in London. The equity benchmark slid 0.6 percent yesterday, ending its longest rally since June 2010, as companies reported lower sales. The index has risen 3.2 percent this month as U.S. lawmakers agreed to extend the government’s borrowing authority until 2014.

“Things are falling in place for this market to continue to move higher,” Patrick Moonen, who helps oversee $244 billion as senior strategist at ING Investment Management in The Hague, said by telephone. “We see the improvement in macroeconomic data. The earnings outlook also supports the market, especially in Europe with the acceleration of growth.”

In China, the preliminary reading of a manufacturing gauge climbed more than forecast. The reading of 50.9 for the purchasing managers’ index from HSBC Holdings Plc and Markit Economics beat the 50.4 median estimate from analysts surveyed by Bloomberg News. Readings above 50 indicate expansion.

National Indexes

National benchmark indexes advanced in 15 of the 18 Western-European markets. The U.K’s FTSE 100 increased 0.6 percent and Germany’s DAX added 0.7 percent. France’s CAC 40 climbed 0.4 percent.

European equities briefly pared gains after the advance reading of a composite index for euro-area manufacturing and services dropped to 51.5 this month from 52.2 in September. The median economist forecast had called for an increase to 52.4.

ABB added 5 percent to 23.05 Swiss francs. The world’s biggest maker of power transformers reported that third-quarter net income rose to $835 million. The average estimate of analysts surveyed by Bloomberg had called for $789 million.

Daimler climbed 3.3 percent to 60.32 euros. The world’s third-largest maker of luxury vehicles said third-quarter earnings before interest and taxes rose 16 percent to 2.23 billion euros, beating the 2.09 billion euros estimated by analysts surveyed by Bloomberg.

Carmakers Rise

A gauge of automobile and auto-part makers posted the biggest gain of the 19 industry groups in the Stoxx 600. Bayerische Motoren Werke AG added 1.9 percent to 83.56 euros.

Celesio jumped 5.4 percent to 22.90 euros. McKesson, the largest U.S. pharmaceutical distributor, agreed to buy a majority stake in the German company and make a tender offer for the remaining publicly traded stock. The shares have surged 34 percent since Oct. 7, the day before a person familiar with the matter said McKesson (MCK:US) had begun talks with Celesio’s biggest investor, Franz Haniel & Cie. GmbH.

Ophir Energy Plc surged 9.1 percent to 326.7 pence, its biggest gain since Mar. 5. The U.K. oil and gas explorer said it has started talks to sell assets in Tanzania.

Banco de Sabadell SA rose 5.8 percent to 1.89 euros. Spain’s fifth-biggest bank said net interest income, a gauge of its main lending business, increased to 451.2 million euros in the third quarter from 414.6 million euros in the preceding three months.

DNB Gains

DNB ASA (DNB) climbed 5.9 percent to 104.10 kroner, its highest price since at least 1992. Norway’s largest bank said third-quarter net income rose 38 percent after net interest income increased and loan losses declined.

SEB AB gained 2.4 percent to 77.10 kronor. Sweden’s fourth-biggest bank by market value posted third-quarter profit of 3.75 billion kronor ($590 million), exceeding the average analyst projection of 3.39 billion kronor.

Credit Suisse (CSGN) lost 2.8 percent to 29 francs. The Swiss lender reported a smaller increase in third-quarter profit than analysts had estimated as earnings at the investment bank tumbled. Net income rose to 454 million francs ($509 million) from a year earlier as an accounting charge related to the bank’s own debt wasn’t repeated. Earnings missed the 724 million-franc average forecast of analysts.

Ericsson Drops

Ericsson AB (ERICB) slid 5.3 percent to 79.75 kronor. The largest maker of wireless-network equipment reported profit and sales that missed analysts’ estimates as competition intensified and carriers slowed investments to expand and upgrade networks.

Third-quarter net income rose to 2.92 billion kronor. Analysts had predicted 3.07 billion kronor. Sales fell 2.9 percent to 53 billion kronor, trailing the average estimate of 54.3 billion kronor.

Husqvarna AB (HUSQB) sank 13 percent to 38.47 kronor, the biggest decline since its initial public offering in June 2006. The world’s largest maker of powered garden tools posted third-quarter net income of 93 million kronor, missing analysts’ forecasts for 222 million kronor, as inefficiencies in its supply chain hurt operating income from the Americas.

Portugal Telecom SGPS SA fell 3 percent to 3.48 euros as Caixa Geral de Depositos SA sold a 6.11 percent stake in the company for 190.6 million euros. The state-owned lender held a 6.31 percent at the end of June, according to Lisbon-based Portugal Telecom’s website.

To contact the reporter on this story: Inyoung Hwang in London at ihwang7@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net


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Companies Mentioned

  • MCK
    (McKesson Corp)
    • $211.12 USD
    • -0.85
    • -0.4%
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