Markets & Finance

On the Move: Bouygues, Continental, Novartis


Plus more European stocks making headlines Wednesday

UK

BAE SYSTEMS was up £0.15 to £4.79... To supply 10,000 trucks to US army - - The Times writes that Armor Holdings, bought by the company two months ago for US$4 billion, has won an order to build 10,000 trucks for the US army. Armor has, according to the paper, been named sole supplier to build a range of cargo and troop transport trucks in a program worth US$3.5 billion.

ITV was down £0.02 to £1.11... third quarter advertising continues to improve The company says third quarter advertising revenues continue to improve. The company says ITV1 NAR rose 2.0% in third quarter (-6.0% Jan-Oct); ITV NAR rose +5.0% (-2.1% Jan-Oct); total market NAR +6.5% (+1.7% Jan-Oct). New growth plan sets four key targets for the business: 3%-5% CAGR topline growth over the next three years; reaffirming the target of a 38.5% SOCI for the ITV family of channels in 2012; doubling ITV's content revenues by 2012 to £1.2 billion; £150 million in online revenues by 2010. The company says the plan allows to sustain investment in original programs and content through self-funding. To dispose of remaining non-core assets. Targets dividend cover of 2 to 2.5x.

HOME RETAIL was up £0.04 to £4.05... Argos like-for-like up 1.8% in second quarter, cautious fiscal outlook Announces third quarter Argos sales of £942 million, +1.8% like-for-like; Homebase £391 million, -8% like-for-like. The company says weather conditions impacted Homebase seasonal categories. The company says for first half, further progress on gross margins and continued cost control is expected to see profits at Homebase ahead of last year and strong growth at Argos. Expects good first half profit result across the group, but the uncertain consumer outlook means the company remains cautious at this stage in the financial year. Homebase numbers worse than forecast.

France

BOUYGUES was up €2.40 to €59.45... Orascom interest in Telecom/Nuclear update - Citing an interview with Naguib Sawiris, CEO of Egypt's Orascom, Les Echos says that the Egyptian telecom group is 'interested' if the company decides to sell Bouygues Telecom. In further news, satirical newspaper Le Canard Enchaine (famed for its political gossip) has outlined what it dubs President Sarkozy's 'favored scheme' for restructuring France's nuclear industry, reports Reuters. According to the paper, Areva and Alstom would be merged and a holding company created in which the company would hold a 35% stake (having disposed of its Telecom business). The state would retain 18% in the new entity.

AIR FRANCE-KLM was down €0.93 to €26.80... Morgan Stanley downgrades to equal-weight from overweight and cuts target to by 13% to €35 as broker believes the European network airlines will face increasing revenue headwinds in 2008. The company says revenue trends are softening on long-haul routes relative to 2005-06, while capacity growth is increasing and business cycle demand is peaking. Adds that fiscal 2008-09 forecasts now generally sit 5-10% below consensus, and notes that history shows that negative EPS revisions are very damaging to airline share price performance.

CLARINS was up €4.58 to €60.00... 'No comment' from L'Oreal on bid rumor - Market rumor does the rounds this morning that L'Oreal could bid for the company L'Oreal declines to comment.

Germany

FMC was up €1.16 to €37.36... Epogen concerns removed - A panel of expert advisers to the FDA cast two 14-to-5 votes yesterday, finding that the drugs should continue to be given to boost haemoglobin to 12 grammes a decilitre of blood both for kidney patients on dialysis and for those who don't receive the treatment.

CONTINENTAL was up €1.34 to €91.66... On VDO effect - the company expects anti-trust approval for VDO in fourth quarter. Sees cashflow from the acquisition of more than €1 billion starting in 2009. Forecasts the unit achieving an operating margin of more than 10% by 2010 at the latest. Earnings-wise, the company expects 2008 core profit to rise, both including and excluding VDO.

Italy

FIAT was up €0.01 to €18.89... Ready to sell Mediobanca stake and support Tata - CEO Sergio Marchionne confirmed the company will sell its stake in Mediobanca, which stands at 1.8%, by the end of the year. the company is also ready to provide technical support to Tata in the bid for Land Rover-Jaguar. the company is considering making a mini-car, CEO Sergio Marchionne reportedly says at the Frankfurt international car show. Adds that talks with China's Nanjing Automobile Corp. to resolve partnership problems are going well.

ALITALIA was down €0.01 to €0.80... To report first half numbers today - the company is expected to disclose first half sales of €1.2 billion and net loss of €56 million, according to a consensus. the company aims to transfer 14 of its 17 intercontinental flights to Fiumicino airports, Rome, from Malpensa airport, Milan, Il Sole 24 Ore reports

Netherlands

HAGEMEYER was up €0.04 to €3.04... Review of its investor conference - the company hosted an investor/analyst conference discussing its US operations. Cheuvreux says has come back with a better insight in how the company may be able to further improve its ROIC and as such believes transparency /visibility of the company realising its targets, has improved. See Broker Views and News - Netherlands.

Nordics

SAS was down SEK6.00 to SEK118.00... Grounds its Dash 8-400 fleet - the company has decided to ground its 27-strong fleet of Dash 8-400 aircraft until further notice following accidents involving the landing gear. The company says this will have a negative impact on the group result of some SEK10-15 million per day. Adds that it is not possible to assess how long the grounding will be in effect.

AKER YARDS was down NOK2.00 to NOK65.25... Cruise ship option not exercised - the company says that NCL has decided not to exercise its option to commission a third cruise ship. the company had announced on 7 September 2006 that it would build two cruise ships for NCL, with an option for a third.

Spain

INDITEX was up €1.25 to €43.72... Deutsche upgrades to buy from hold and raises target to €50 from €46.50. Broker says it has examined the company 's sensitivity to slowing like-for-like sales growth and a slowdown of expansion, and concludes that this does not present more than a 5% earnings risk. See Broker Views and News - Spain.

REPSOL YPF (REP) was down €0.06 to €24.83... No decision on CLH stake sale - the company aims to sell 10% of pipeline firm CLH for €350 million, according to Expansion. The company says the company has mandated Santander to search for possible buyers. After the sale, the company will have a 15% stake in CLH. the company responds to the press rept, saying that, as stated in the 2005-09 strategic plan, it is always considering possibilities to optimise its portfolio of assets, including the sale of this stake in CLH. However, says no decision has yet been made. the company adds that it intends to remain as a shareholder in CLH. Ecuador will reportedly soon start renegotiating contracts with the company and Andes Petroleum in order to ensure the state receives a higher share of oil revenues.

Switzerland

NOVARTIS (NVS) was up CHF0.45 to CHF64.50... To up payout, sees growth accelerating - the company holds its Pharma brand and business review in the US today. The event starts at 13:00 GMT but slides have been published already. Among higlights: the company projects Pharmaceuticals to show double digit sales growth over the period 2008-2011, with return to strong growth in second half08. the company plans to return up to 100% free cash flow, after dividends and acquisitions, via share buybacks.

SWISSCOM was up CHF6.50 to CHF425.50... Dresdner upgrades to buy from hold - with a new target of CHF520. The broker cites three good reasons to buy now: the stock has underperformed the sector despite solid results; its operational performance is superior to the rest of the sector and its valuation is compelling.


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