Markets & Finance

European Movers: Rio Tinto, Soc Gen, Ericsson


Plus more European stocks making headlines in Friday's market

UK

RIO TINTO

Up GBP6.44 to GBP56.00

Chinalco, Alcoa take 12% stake

Shining Prospect Pte. Ltd, a Singapore based entity wholly owned by Chinalco and into which Alcoa has committed US$1.2bn by way of a convertible instrument, today announces that it has acquired c. 12% of Co.’s existing share capital.

BRITISH AIRWAYS

Down GBP0.15 to GBP3.17

9M sales flat, keeps growth guidance

Reports 9M revenue GBP6.622bn, +0.9%; op profit of GBP734m, +28.5%; op margin 11.1% (vs 8.7%); PTP GBP788m, +34.9%. Says fuel costs rose GBP72m in 3Q. Notes T5 will open in less than 8 weeks. To launch new London City-New York services. Reiterates revenue growth guidance for FY at 3% to 3.5%, in spite of weakness in shorthaul premium and some non-premium markets.

BIFFA

Up GBP0.19 to GBP3.23

Rumours of GBP4.00/sh counterbid by Macquarie - note traders.

FKI

Up GBP0.17 to GBP0.67

Has received an approach

Co. confirms it has received an approach that may or may not lead to an offer being made. Says the approach is very preliminary.

FRANCE

ARCELOR-MITTAL

Up EUR 3.03 to EUR 47.13

EU threatens rivals with higher tariffs

The EU’s threat on steel tariffs from China has been extended to Taiwan and South Korea, with a new probe into cheap imports that compete against EU producers, Bloomberg reports. Separately, Co. announces that it has acquired 98.6% of the remaining 35.5% Acindar stake that it is acquiring.

SOC GEN

Up EUR 4.60 to EUR 87.80

Credit Agricole arrives on the scene - press

Credit Agricole has engaged its Calyon unit and hired Lazard to advise on a potential bid for Co., according to Les Echos. This comes after BNP Paribas admitted yesterday it too was looking at the dossier because, as it said, ‘all European banks’ are doing the same. Meanwhile, the FT reports that Co. is taking advice from Merrill Lynch and Rothschild on defence strategies. Though a Franco-French tie-up would have domestic political support, Co.’s attempt to shore up its independence and potential regulatory issues muddy the waters.

VINCI

Up EUR 2.58 to EUR 48.00

Posts 4Q07 sales up 20% / UBS lifts target

Co. posts better-than-expected FY07 sales of EUR 30.40bn, +16.8%. Says 4Q sales came in at EUR 8.65bn, +20.2%, also beating consensus. UBS lifts target to EUR 64.5 from EUR 63.5. Believes FY07 sales should alleviate investors fears on 1) sudden slowdown in Construction 2008 given strong backlog, and 2) government claw back on 2008 tariff increase in motorways. Keeps buy.

GERMANY

SINGULUS TECHNOLOGIES

Up EUR 1.36 to EUR 9.99

Acquisition news buoys stock

Co. is buying Swiss Oerlikon’s Blu-ray business. UniCredit says this is an important step towards further consolidation within the optical disc production equipment industry. Keeps hold rating.

THYSSEN KRUPP

Up EUR 1.96 to EUR 34.70

To buy back up to 3% more stock - some 15.8m of its own shares.

ITALY

UNIPOL

Up EUR 0.13 to EUR 2.02

To use cash after dividend to fund growth

CEO Carlo Salvatori says that Co. will use the EUR 1.4bn-EUR 1.5bn it had in cash after dividend payments to fund the expansion of its activities. Adds that Co. would grow internally, but would consider making an acquisition even though potential deals were few and expensive in Italy. Co. said yesterday that expects to post that its net FY07 consolidated profit rose by 27% to EUR 460m. Explained that the rise was in line with its 2006-2009 industrial plan. Says gross premiums totalled EUR 8.93bn for 2007 while premiums for its non-life business rose 5.5% to EUR 4.285bn. Adds that those for its life business fell 27% to EUR 4.645bn. Says that for 2008, looks for gross direct written premiums of EUR 8.9bn: EUR 4.5bn for life and EUR 4.4bn for non-life.

BULGARI

Up EUR 0.18 to EUR 7.90

Brokers cut targets post FY07 sales

Citigroup cuts target to EUR 8.30 from EUR 11, to reflect the recent sharp de-rating of the luxury peer group. Keeps hold recommendation. UBS lowers target to EUR 12 from EUR 13 and cuts FY07-FY08 EPS by 2%. Says current valuation appears to reflect short-term risks fully. Keeps buy recommendation. Co. posted FY07 in line with consensus at EUR 1.093b, up, 8.2% y/y. Said that in 4Q07 sales grew 7.4% to EUR 347.7m.CEO Francesco Trapani said that on the basis of the sales numbers he feels very confident Co. can meet its net profit target for the year.

UBI BANCA

Up EUR 0.21 to EUR 16.96

Integration ahead of expected date

Co. has said that 32% of its integration activities had been completed, vs. the 30% target set in its 2007-2010 business plan. Adds expects over 80% of integration activities to be completed by the end of the year and the total completion by end-2009.

NETHERLANDS

TOMTOM

Up EUR 1.20 to EUR 37.86

Garmin introduces GPS phone

Co.’s US peer Garmin yesterday introduced its nuvifone, a wireless handset that incorporates GPS. In addition, Mio Technology, a leading maker of mobile GPS devices, and Qualcomm Incorporated, a developer of advanced wireless technologies, announced a collaboration to develop connected PNDs. SNS Securities says the news shows that traditional PND players are recognising the enormous potential for navigation services on mobile/smart phones.

NORDICS

ERICSSON

Down SEK0.33 to SEK13.80

Flattish outlook / Motorola may sell mobile phone unit

Co. posts lower-than-expected 4Q operating income of SEK7.6bn on sales a touch higher than forecast at SEK54.5bn. Proposes a dividend payment of SEK0.50 per share, as expected. Co. will implement a new cost cutting scheme of SEK4bn with full effect in 2009. As part of the plans,Co. will cut more than 1,000 jobs in Sweden. Sees ‘flattish’ development in mobile infrastructure market in 2008. Sees good development in professional services market in 2008. Says market and product mix continues to affect sales and margin in the Networks division. Motorola is considering divesting its loss-making mobile phone unit amid demands from activist fund Carl Icahn.

VOLVO

Up SEK4.75 to SEK89.75

Goldman cuts tgt / WestLB upgrades / Major US strike

Goldman trims target to SEK90 vs SEK115, keeps neutral. Points out truck demand in Europe or the US could be worse than expected. WestLB upgrades to add vs hold, keeps target at SEK100. Believes global acquisitions have not yet paid off because problems with initial restructuring expenses. Believes that a recovery of the NAFTA truck market and a stable Asian truck market could enable Co. to achieve higher earnings than its peers in the European truck market in softer market conditions. Separately, a major strike has broken out in one of Co.’s factories in Virginia, US with the UAW union calling out 2,600 workers at the New River Valley plant. The production of c.100 trucks per day has in large come to a halt.

MOELLER MAERSK

Up DKK1100.00 to DKK50100.00

Good news piling up - Cheuvreux

Cheuvreux highlights currant positive newsflow, with the Baltic dry Index recently scoring its biggest daily gain ever. Also notes the asset swap with Hegh Autoliners adds US$200m post tax. Broker rates outperform with a target of DKK75,000

SPAIN

COLONIAL

Down EUR 0.16 to EUR 1.54

GE withdraws interest in due diligence

GE says no deal has been reached with Co. regarding carrying out due diligence, and thus GE has no interest in conducting due diligence. Co. said yesterday evening that it has agreed to open its books to Investment Corporation of Dubai. Another sovereign wealth fund - Qatar Investment Authority - is also interested in Co., according to La Gaceta.

FERROVIAL

Down EUR 0.49 to EUR 42.50

Merrill cuts target / Tax reform impact

Co. says that the proposed abolition of the industrial building allowance in the UK could potentially reduce its net profit by approximately EUR 1.230bn in 2008. Following the statement from Co., Merrill Lynch cuts target to EUR 63 from EUR 65, buy.


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