From Standard & Poor's European MarketScope
STM (STM) was up €0.24 to €13.82. Ahead of the company's third quarter report Oct. 25, JP Morgan expects the company to exceed the midpoint of its revenue and gross margin guidance, driven primarily by improvement in flash memory pricing, solid demand in wireless and automotives segments. Rates neutral. Goldman sees US$2.23 billion in revenues, gross margin of 34% and EPS of US$0.07. Rates outperform. Lehman says third quarter revenues and margins will likely fall toward the mid to high end of guidance on strength in Flash, computing and digital consumer businesses. Keeps overweight. Fideuram Wargny downgraded the shares to hold from buy, and trimmed its target to €14 from €16.
TOTAL (TOT) was down €1.40 to €201.40. Oil futures dropped to their lowest levels in almost three months on Thursday, triggered by the build in U.S. crude and gasoline inventories, a fall in product demand and reduced fears about the impact hurricane Wilma will have on energy output in the Gulf of Mexico. Cheuvreux trimmed its target on Total to €230 from €245 and keeps outperform rating after cutting third quarter forecasts by 6% due to higher unit costs in E&P and weaker trading environment in chemicals.
FRANCE TELECOM (FTE) rose €0.04 to €22.90. CSFB says BSkyB's acquisition of Easynet for £211 million could spark investor interest in other unbundlers with a leading position in the market, with potential further M&A in this area both from consolidation and now from convergence.
COMDIRECT was up €0.04 to €6.59. The company posted third quarter net profit of €14.5 million versus estimates of €13.8 million. It aims to make a 2005 pretax profit similar to that achieved in the previous year, when it earned some €51 million before tax. Kepler notes that the stock has been one of the main underperformaners in the sector despite a stellar operating performance. The broder believes this is unjustified and keeps the stock on buy with a €8 price target.
RWE was down €0.03 to €51.50. The company may sell its services unit RWE Solutions, FAZ notes, with the company expecting €700 million to €1 billion from the divestment.
ALTANA fell €0.32 to €45.37. According to press reports, the company is poised to make three more acquisitions to strenghten its chemical business, one of which will probably happen by the end of this year.
BENETTON rose €0.08 to €8.46. The company says orders for its fall/winter collection are going better than expected, thanks to the encouraging sell-out of the new collections.
SNAM RETE GAS was up €0.09 to €4.58. The Italian government is drawing up a new law to introduce a golden share to the company's statute, placing a cap of 5% on shareholdings held by private investors, reports Il Sole 24 Ore. Also, according to the paper, if Cassa Depositi e Prestiti buys a stake in the company the antitrust will likely force it to reduce its 10% stake in ENI.
GENERALI rose €0.04 to €25.11. The company plans to get a life insurance licence in Shanghai by early December as it aims to expand in China's lucrative life insurance business, reportedly.
ASML (ASML) rose €0.26 to €14.32. Japan's Toshiba raised its first half operating profit estimate to JPY51.4 billion from JPY20.0 billion, citing strength in its chip and other businesses.
ERICSSON (ERICY) fell SEK0.10 to SEK26.10. The company posted third quarter net profit of SEK5.3 billion vs SEK 4.3 billion in the previous year on net sales up 14% year-over-year to SEK36.2 billion. Operating profit comes in 19% higher year-over-year at SEK7.8 billion, with an operating margin of 21.6% (20.7% in the previous year). Cash flow before financial investing activities amounts to SEK1.1 billion negative vs SEK5.2 billion in the third quarter of 2004. EPS comes in at SEK0.34, vs. SEK0.27. The company says the industry 2 billion mobile subscriber mark was passed, and sees potential for 3 billion within five years. HSBC notes that these numbers are unexciting and in the middle of consensus range.
ASTRAZENECA (SE) (AZN) rose SEK5.50 to SEK366.00. The company says newly released top-line results from the BOLDER II (Bipolar Depression) study have underlined the potential for the company's Seroquel in the treatment of patients with major depressive episodes associated with bipolar disorder. Based on prior discussions with the US Food and Drug Administration (FDA) and the results of BOLDER II, the company plans to file for a US licence extension for Seroquel in the treatment of depressive episodes associated with bipolar disorder around the end of this year (2005).
BP (BP) fell £0.03 to £6.07. Declinies in crude oil prices weighed on the stock. Lehman Brothers forecast third quarter reported net income of US$3.65 billion; adjusted EPS of 13.8 pence; group operating profit of US$8.043 billion; operating profit in Upstream of US$6,528 million, up 35% year-over-year; Downstream operating profit of US$1,710 million, down 12% quarter-over-quarter. The broker retains its underweight rating, with a target price of £6.45.
COMPASS GROUP was down £0.10 to £1.76. The company has instructed Freshfields Bruckhaus Deringer to conduct an investigation into the relationships between Eurest Support Services (ESS), IHC, and the U.N. It adds that pending progress in that investigation, the company has decided that Peter Harris, the CEO of the UK & Ireland, Middle East and Africa division, should be suspended. His responsibilities will be taken over by Gary Green, CEO of the Americas Division, on an interim basis. There have been allegations of corrupt buying practices at the U.N., suggesting the company had access to secret bidding information.
BAT (BTI) rose £0.08 to £11.76. The company's Canadian subsidiary is to close its cigarette factory in Guelph, Ontario, in 2006 and its fine cut/roll-your-own and leaf processing operations in 2007, as a result of the on-going decline in sales industry-wide. Production will be transferred the company's Monterrey, Mexico, plant. The move will generate restructuring charges of approximately £200 million during the next three years, with the largest portion to be taken before the end of 2005. Annual savings, once full benefits have been realized, would be approximately £40 million. Also, the company has exercised its pre-emption rights over part of Andresen Holdings' shareholding in Skandinavisk Tobakskompagni (STK), and as a result, its stake in STK will increase to 32.3% from 26.6%, at a purchase price of €140 million. Prepared by European MarketScope reporters Zaida Espana (France), Michael Sanderson (Germany), Mariella Mongio (Italy), Alexander Wisch (Netherlands), Holly Cook (Nordic), Emma Stevenson (Spain), Pawan Girglani (Switzerland), and Rocio Opazo-Aniotz (UK)