Markets & Finance

Cable & Wireless Falls on Revenue Forecast


From Standard & Poor's European MarketScope

France

VINCI gained €0.75 to €69.25 in Friday's session. The French government will ask prospective bidders to submit their final offers for three toll road operators by Nov. 7, according to La Tribune. The government's toll road privatisation plan is valued at €13 billion.

PUBLICIS rose €0.18 to €26.54. Vincent Bollore has reportedly upped his stake in Aegis to 13.35% from 12.6%, reinforcing his position as the largest single shareholder in the UK ad agency. The company's CEO Maurice Levy is due to hold a meeting today with Bollore, the French financier, The Independent reports. The UK daily says the planned meeting in Paris is understood to have been arranged by Alain Minc, one of the French financial community's leading rainmakers. It says the leaking of the planned meeting could yet derail the talks between the two men. Any discussion between them is bound to raise the temperature in the bidding for Aegis which Levy has already indicated the company would be willing to buy for £1.40, the paper notes.

EADS fell €0.01 to €29.10. The CEO of the company's Airbus unit says Europe and the U.S. should work to find a political solution over the issue of state aid. Gustav Humbert called for the U.S. to respond to its gesture. Airbus has won shareholder backing to launch the Airbus A350, to compete directly with the Boeing 787 Dreamliner. Shareholders also announce that in spite of European government commitment to provide aid, they would not draw on this money until the end of 2006 on two conditions: a credible prospect of negotitaions resuming with the U.S. which should show similar restraint, writes the FT. Washington, however, has dismissed the gesture.

Germany

BAYER (BAY) declined €0.07 to €30.05. The company won't make a counter offer for BHI, Boots' consumer healthcare business, which is being snapped up by Reckitt Benckiser.

PORSCHE fell €6.50 to €611.00. The company has secured another 8.2% of VW, and now owns about 18%.

VW fell €0.42 to €49.69. The company's Audi unit plans to launch a SUV called Q7 in the U.S. in June as part of a sales push to take on rivals DaimlerChrysler (DCX) and BMW, reports the Wall Street Journal.

DAIMLERCHRYSLER (DCX) fell €0.10 to €43.30. Mercedes car group sales rose 4.9% in September. The Mercedes-Benz unit's sales were up 8.4%. Smart brand unit sales were down 19.6% in September.

BMW was up €0.09 to €38.74. September group car sales were up 11.4%. BMW brand unit sales rose 13.5% last month. Mini brand sales were up 1% in September.

SCHERING (SHR) was up €0.11 to €52.95. U.S. peer Wyeth upped its guidance after the close Thursday.

AWD fell €2.31 to €24.48. Citigroup cut its target to €35 from €42 but sticks to its buy rating. This follows Thursday's profit warning, in which the company said it won't be possible to fulfill market expectations for the full year. It expects total third quarter revenues to come in at €142 million, a 13% decline year-over-year. The company puts third quarter EBIT at around €1 million.

Italy

LUXOTTICA (LUX) was down €0.22 to €21.11. The company signed a 10-year licence deal with Burberry for the design, production and worldwide distribution of prescription frames and sunglasses under the Burberry name. The agreement will begin on Jan. 1.

PARMALAT fell €0.43 to €2.60. S&P says has recently been served with a civil legal claim on behalf of the company, rated by S&P, that defaulted in late 2003. (Standard & Poor's, like S&P European MarketScope and BusinessWeek Online, is a unit of The McGraw-Hill Companies.) S&P firmly believes the claim is baseless and without any merit, and intends to vigorously oppose this lawsuit. It notes the total amount of claims by the company vs. Italian and international financial institutions and professional firms is over €50 billion - several times the level of the actual default. S&P says ratings require the full and honest participation of the issuer and it was repeatedly misled by the company and its advisers.

Netherlands

OCE gained €0.19 to €12.68. The company's third quarter EBIT was in line with expectations at €13.6 million, down from €16.6 million in the previous year. Quarterly net profit came in at €8.9 million on revenues of €649.6 milion. The company is guiding towards a fiscal 2005 EBIT, excluding leases, of €38 million.

WOLTERS KLUWER declined €0.08 to €15.46. The company acquired U.S. Tripoint Systems Development Corp. No transaction details were disclosed.

Nordic

BANG & OLUFSEN was up DKK53.00 to DKK583.00. The company reported fiscal first quarter net profit of DKK32.6 million, up from DKK6.7 million in the same period last year. PTP comes in at DKK50 million, vs. DKK10 million last year. Sales are up 10% at DKK798.7 million. The company says, however, developments in first quarter, the year's weakest, are not indicative for the rest of the year. Still, it maintains expectations of annual PTP of DKK400 million (DKK430 million under IFRS). The company also notes that more than 80% of the employees have exercised the right to exercise right to purchase shares, a deal approved by AGM in 2003.

MOELLER MAERSK added DKK1400.00 to DKK60900.00. Moeller is to build the world's largest container ship, able to load 12,000 20-foot long containers, TradeWinds reports. The ship would be for delivery next year.

SKANDIA declined SEK0.50 to SEK39.80. Chairman Bernt Magnusson resigned from the board, saying he does not consider it right to continue to lead the work of the board when there are different opinions on an important and central issue. He says that "now that the Board has decided to reject the offer for the company, it is natural and in Skandia's best interests that I hand over the chairman's gavel to someone who shares the opinion of the majority within the board". Lennart Jeansson is appointed new chairman.

Switzerland

GIVAUDAN added CHF18.00 to CHF852.00. Nine month sales rose to CHF2.086 billion from CHF2.065 billion year-over-year, above expectations of about CHF2.061 billion. The company remains confident for a strong fiscal year result. Zuercher KantonalBank upgraded the shares to overweight from marketweight.

MICRONAS fell CHF8.20 to CHF46.85. The company issued a statement, saying it expects fiscal year sales to be in the CHF830 - CHF840 million region and profit in the CHF45 million - CHF50 million range, which would be an unexpected fall from last year's results. Also, the company released preliminary third quarter results, which surprised to the upside on the back of some gross margin upside, in Goldman Sachs' view. That said, the broker thinks third quarter order intake was extremely disappointing (down 13% from the preceding quarter, vs. the broker's +6% estimate). Goldman maintains in-line but would expect share price weakness in accordance with pending consensus estimate cuts for 2006 forecasts (in the 15% range).

United Kingdom

CABLE & WIRELESS (CWP) declined £0.20 to £1.22. The company sees first half revenues down 6%, noting that it had already warned downward pricing pressure on legacy revenue was intensifying. It says that since the announcement of the Energis transaction there has also been some loss of momentum in sales planning. The company also says it has suspended cost reduction initiatives in the UK business awaiting OFT approval of the Energis transaction.

RECKITT BENCKISER added £0.30 to £17.40. The company announced the acquisition of Boots Healthcare International (BHI) from Boots for a consideration of £1.926 billion in cash. CEO Bart Becht says substantial synergies will result from the integration of BHI. Specifically, the company targets £75 million in cost synergies and £130 million in net working capital synergies by 2008. The Reckitt chief says the deal is targeted to be immediately earnings enhancing (excluding a £150 million one-off restructuring charge). Becht says this factor, together with the growth potential and attractive margin profile makes this a good acquisition for shareholders. Boots says that after the payment of anticipated taxation and other costs associated with the BHI-Reckitt transaction, the company intends to return about £1.43 billion of the proceeds (equivalent to approximately £2.00 per share) by way of a special dividend.

SAINSBURY rose £0.04 to £2.84. The company reported second quarter sales up 6.6%, or up 5.4% ex-petroleum. Like-for-like sales were up 4.1%, or up 2.8% ex-petrol. The company highlights it is its third consecutive quarter of LFL sales growth since its recovery plan announced in October, 2004. Still, it notes there was 1.7% deflation in grocery during the period. ABN Amro is pleased with trading, but cut its target to £2.80 from £2.90 on the back of ongoing weakness in banking operations. It rates the shares hold.


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