July 19 (Bloomberg) -- European stocks rose for the first time in three days after profit from SAP AG and Roche Holding AG beat analysts' estimates.

SAP and Roche joined Novartis AG among members of the Dow Jones Stoxx 50 Index to post better-than-expected earnings so far in this reporting season. Vodafone Group Plc gained after the mobile-phone company said it added more subscribers than analysts anticipated. Actelion Ltd. rallied the most in five years after the biotechnology company said net income almost doubled.

``The results are a confirmation that we are still in a positive earnings environment,'' said Kevin Lilley, who helps manage about $2.5 billion at Royal London Asset Management. ``That should give people the confidence to stick with equities.''

All 18 industry groups in Europe's Stoxx 600 Index advanced. Stocks rebounded from a two-day rout spurred by concern that losses at two Bear Stearns Cos.' hedge funds may signal further weakness in the U.S. loan market, damping earnings prospects for financial companies.

``The two big bellwethers, SAP and Roche, have both delivered very substantial numbers,'' said Manus Cranny, an analyst at Cantor Index in London. The figures are ``reassuring for the pan-European outlook.''

SAP's results came after International Business Machines Corp. of the U.S., the world's biggest computer-services company, raised its annual earnings forecast as profit beat analysts' projections. The upbeat outlook helped lift the Europe Stoxx Technology Index to a five-year high.

The Stoxx 600 added 1 percent to 396.94. The Stoxx 50 also gained 1 percent, and the Euro Stoxx 50, a measure for the euro region, increased 1.1 percent.

National Markets

National benchmarks advanced in all 18 western European markets except Finland and Iceland. The U.K.'s FTSE 100 rose 1.1 percent. France's CAC 40 added 1.2 percent, as did Germany's DAX.

Shares of SAP rallied 6.1 percent to 40.06 euros, the biggest gain in more than a year. The world's largest producer of business-management software reported an 8.2 percent rise in second-quarter profit to 449 million euros ($619 million). Sales of software licenses, a gauge of future consulting and maintenance fees, jumped 18 percent to 715 million euros. Both figures beat analysts' estimates.

``The growth is really coming through,'' said Andy Lynch, who helps manage about $11 billion at Schroder Investment Management in London. ``I recently bought the shares for the first time in a couple of years.''

Cap Gemini, Roche

Cap Gemini SA, Europe's largest computer-services company, rose 4 percent to 57.11 euros. Sage Group Plc, Britain's biggest maker of accounting software, advanced 2.1 percent to 241 pence.

Roche jumped 2.9 percent to 220.5 Swiss francs. The shares gained the most in a year after the drugmaker reported a 24 percent increase in first-half net income to 4.92 billion francs ($4.1 billion). Profit before minority interests was 5.8 billion francs, beating analyst estimates of 5.2 billion francs.

Vodafone advanced 1.8 percent to 161.9 pence after the company added 9.1 million subscribers in the three months through June, bringing the total to 232 million. That exceeded analysts' estimates of 230 million, according to a Bloomberg survey.

Shares of Actelion surged 13 percent to 64.2 francs. The Swiss company, whose shares have doubled in the last 12 months, said second-quarter profit rose 89 percent to 97.05 million francs on revenue from its best-selling Tracleer lung treatment.

The company ``reported a blow-out set of second-quarter results and increased full-year guidance yet again,'' Goldman, Sachs & Co. analysts wrote in a note to clients.

BHP, Sandvik

Shares of BHP Billiton Ltd., the world's biggest mining company, increased 3.8 percent to 1499 pence as copper rose for a second day. Anglo American Plc, the second-biggest mining company, gained 3.3 percent to 3202 pence.

Copper futures for September delivery climbed 6.45 cents, or 1.8 percent, to $3.6275 a pound at 9:39 a.m. on the Comex division of the New York Mercantile Exchange. A close at that price would mark the biggest percentage advance since July 2.

Sandvik AB increased 3.7 percent to 148.5 kronor. The world's biggest maker of metal-cutting tools said second-quarter profit rose 38 percent to 2.62 billion kronor ($393 million) as the Swedish company tapped demand for rock-excavation gear from its mining clients. Analysts had predicted earnings of 2.32 billion kronor.

Nestle SA advanced 2.2 percent to 474.25 francs after the Wall Street Journal reported that the company discussed a merger with PepsiCo Inc., prompting speculation of more deals among snack and drink makers.

``It does signal there is a bit of a consolidation wave,'' said Marco Gulpers, an analyst at ING Financial Markets in Amsterdam. ``We've seen a tremendous amount of deals over the last 18 months.''

Danone, Unilever

Groupe Danone SA, the world's largest yoghurt maker, a rallied 2.4 percent to 57.13 euros. Unilever, the world's second- largest producer of food and detergent, added 2.4 percent to 23.97 euros.

``No one who has the slightest acquaintance with Nestle will put any weight in this report,'' company spokesman Francois Perroud said. The food producer's acquisition policy has been explained by executives, he said by telephone. PepsiCo spokesman Mark Dollins declined to comment on the speculation.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net;

Last Updated: July 19, 2007 12:01 EDT