Markets & Finance

Ryanair Rises on Strong Results


Britain

Cigarette maker Imperial Tobacco was up £0.31 to £14.82, after the widow of a man who died from lung cancer failed in her bid to sue the company. Lord Nimmo Smith, sitting in the Court of Session in Edinburgh, dismissed the McTear litigation claim against the company, saying the pursuer's case fails on every issue.

Discount airline Ryanair waas up £0.21 to £6.52 after the company reported fiscal-year net profit rose 19% to €268.9 million, higher than the Reuters forecast of €248 million. Revenue jumped to €1.337 billion, up from €1.074 billion, while passenger traffic rose 19% to 27.6 million.

Consumer staples group Unilever was down £0.12 to £5.28 after the bank UBS downgraded the company to reduce from neutral, citing the shares' strong performance (up 11% over the last four weeks). Having moved significantly above broker's £4.90 price target, the shares are now over-valued, the broker said.

Oil group Shell Transport was down £0.08 to £4.78 after the Sunday Telegraph reported that the company is to auction its liquid petroleum gas (LPG) business and is hoping for bids of up to $3 billion. Some of the world's largest private equity players have expressed an interest in the business, which generates earnings of about $400 million.

Manchester United was down £0.03 to £2.97 after the Sunday Telegraph reported over the weekend that Nike is threatening to abandon its £300 million sponsorship deal with the soccer club unless the team can prove next season that it can compete for top honors. Also, the Independent on Sunday said Malcolm Glazer agreed to a deal with bankers backing his takeover of the company that would make it difficult for the club to sign top stars.

Rentokil Initial, the pest-control and business services group, was down £0.06 to £1.48 after The Mail on Sunday newspaper reported that the company is considering a bid for rival PHS. PHS said this month that it had received a takeover approach, which was believed to have come from JP Morgan Partners, the private equity arm of the bank. Meanwhile, Rentokil Initial, which issued a profits warning last week, is close to selling its laundry business, Initial Textile Services, to rivals Davis Service group and Johnson Service Group in a deal that could be valued at more than £100m.

France

Chipmaker STMicroelectronics was up €0.33 to €12.59 after Citigroup upgraded the company to buy from hold and lifted its target to $18.00 from $15.60. The broker raised its earnings per share estimates for 2005 to 2007 (including boosting 2006 estimates by 65%) to reflect the positive impact of the company's announced cost-cutting program.

Engineering outfit Alstom was up €0.04 to €0.73 after the company reported fiscal year 2004 to 2005 operating profit of €550 million compared to €168 million the previous year. The net loss of €860 million was lower than the €1.836 billion reported the previous year, but still than the €617 million analysts were expecting.

Aerospace giant EADS, parent of Airbus, was €0.42 to €24.10 after the Wall Street Journal Europe reported that the U.S. will take its case against Airbus subsidies to the WTO. The report said that the U.S. Trade Representative's office said it will ask the global trade enforcer today to appoint a panel to decide the fate of government aid doled out on each side of the Atlantic.

Liquor group Pernod Ricard was up €1.30 to €125.90, after the Daily Telegraph newspaper reported that rival Constellation Brands is facing significant hurdles in its competing bid for British spirits and wine group Allied Domecq. The analysts from the investment bank Dresdner Kleinwort Wasserstein told the newspaper that the Constellation Brands deal could fail because of the weakness in the market for junk debt. Last week Allied Domecq said it will hold an emergency general meeting on July 4 to approve Pernod Ricard's takeover offer.

Cosmetics group L'Oreal was down €0.40 to €59.05, after the investment firm ETC Pollak Prebon highlighted data from COLIPA, the European association of cosmetics, which warned that fiscal year 2004 sales in Western Europe were up 2% to €59.9 billion compared to a 3.5% increase in 2003. The firm noted that the French and German markets, which make up 36.1% of total sales, remain sluggish and have shrunk by 1.7% and 0.5%, respectively.

Germany

Retail group Metro AG was down €0.54 to €40.50,after the company said it still expects earnings per share to rise as much as 12% this year as it opens more stores in Eastern Europe. The company also expects sales growth of as much as 6%.

Hypovereinsbank was down €0.34 to €20.11, Standard and Poors put the Italian bank bidding for the company, Unicredito, on a negative watch. Separately, Sal Oppenheim upgraded the company to buy from neutral and increased its price target to €24, saying that chances of other banks counter-bidding are high. Meanwhile, Wall Street Journal reported that Italian bank Unicredito could reach a deal to buy the company as soon as next week. The deal is slated to be worth around €16 billion.

Deutsche Bank was down €0.57 to €63.18 after the Russian newspaper Vedomosti reported that the company is in talks to buy a controlling stake in the Russian bank Impexbank from billionaire Boris Ivanishvill for around $200 million.

Building materials group HeidelburgCement was up €1.87 to €52.07 after the company said it plans to increase its stake in Indonesia's cement maker PT Indocement to 65.1% in a transaction valued at €310 million. The company said it will make the acquisition by issuing 6.53 million new shares priced at €47.42 to two companies owned by the Merckle family, a shareholder in the company.

Clothing maker Hugo Boss was down €0.27 to €24.68, after the company reiterated its profit target for 2005. The group said it expects net income to rise to €100 million from €88.2 million, while sales will advance 10% from €1.17 billion.


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