Aug. 11 (Bloomberg) -- Germany's DAX slipped for a first session in four, led by Deutsche Telekom AG and RWE AG after both companies reported profit that lagged analysts' estimates.

Schering AG rose the most in almost five months on talk the company may be bought by larger rival Novartis AG.

The benchmark DAX Index lost 37.40, or 0.8 percent, to 4953.17 as of 1:11 p.m. in Frankfurt, retreating from yesterday's more than three-year high. Twenty-four of the benchmark's 30 stocks declined.

DAX September futures declined 0.1 percent, while the HDAX Index of the country's 110 biggest companies lost 0.8 percent.

Deutsche Telekom dropped 33 cents, or 2 percent, to 16.13 euros. Europe's largest phone company said second-quarter net income rose 63 percent to 943 million euros ($1.17 billion). That's less than the 1.2 billion-euro median estimate of 14 analysts surveyed by Bloomberg News.

``Investors are disappointed,'' said Achim Matzke, a equity strategist at Commerzbank AG in Frankfurt. ``Deutsche Telekom has not been a main driver of the upward swing in European equities. There are better opportunities.''

RWE slipped 92 cents, or 1.6 percent, to 55.28 euros. Europe's third-largest utility said second-quarter net income climbed 4.6 percent to 452 million euros, less than the 481.5 million-euro median estimate of 11 analysts surveyed by Bloomberg News.

Schering, the world's biggest maker of birth-control pills, added 1.49 euros, or 2.9 percent, to 53.47 euros.

``Schering shares are rising on speculation about Novartis,'' said Nicola Facciorusso, an equity sales trader at Sal. Oppenheim Jr. & Cie. KgaA in Munich. ``I'd be surprised if this happens. We've been hearing for 15 years that someone will take over Schering.''

Schering spokesman Oliver Renner declined to comment. Novartis representatives weren't immediately available.

The following stocks rose or fell in Germany. Stock symbols are in parenthesis after the company name.

Aareal Bank AG (ARL GY), a commercial property lender, Dropped 1.21 euros, or 4.2 percent, to 27.69 euros. Second- quarter net income after minorities rose more than five-fold to 11 million euros, spokesman Joerg Mueller said. Earnings fell short of the 15 million-euro median estimate of eight analysts surveyed by Bloomberg.

DaimlerChrysler AG (DCX GY), the world's fifth-largest carmaker, fell 82 cents, or 1.9 percent, to 41.35 euros. Western European car sales declined 1.8 percent last month as fuel prices rose and economic growth slowed in the region, said the Frankfurt- based German Automobile Manufacturers Association.

Bayerische Motoren Werke AG (BMW GY), the world's second- largest luxury carmaker, dropped 20 cents, or 0.5 percent, to 37.09 euros.

Draegerwerk AG (DRW3 GY), the maker of air filtration masks and anesthesia equipment, rose 62 cents, or 1.3 percent, to 48.52 euros. The company said first-half sales rose 9.6 percent while orders gained 13 percent.

Evotec OAI AG (EVT GY), the company that screens and synthesizes chemical compounds, dropped 7 cents, or 2.5 percent, to 2.74 euros after saying its second-quarter net loss widened to 23.4 million euros, hurt by currency losses and investments into the development of new medicines.

Funkwerk AG (FEW GY): The maker of phone systems added 95 cents, or 3.1 percent, to 31.77 euros. The company said second- quarter earnings before interest and tax rose 10 percent to 2.3 million euros and sales advanced 16 percent to 61.2 million euros.

Hannover Re (HNR1 GY), the fifth-largest reinsurer, fell 1.36, or 4.2 percent, to 30.90 euros. Second-quarter net income rose 6 percent to 121.4 million euros, falling short of the 123 million-euro median estimate of eight analysts surveyed by Bloomberg.

MAN AG (MAN GY), Europe's third-largest truckmaker, added 83 cents, or 2.1 percent, to 40.58 euros. The company said second- quarter net income increased 33 percent to 97 million euros as vehicle sales in eastern Europe and the Middle East rose. Profit beat the 91 million-euro estimate of analysts surveyed by Bloomberg.

Medion AG (MDN GY), the electronics distributor, slipped 32 cents, or 2.4 percent, to 12.92 euros. The company said net income fell by more than half to 3.2 million euros, its fifth quarterly decrease, because of ballooning costs and dwindling demand in European markets. Analysts surveyed by Bloomberg News forecast a figure of 3.3 million euros.

Stada Arzneimittel AG (SAZ GY) dropped 72 cents, or 2.5 percent, to 28.18 euros. Germany's No. 3 maker of generic drugs posted second-quarter net income of 15.1 million euros that fell short of the 16 million-euro median estimate by analysts surveyed by Bloomberg News.

TUI AG (TUI1 GY), Europe's largest travel company, declined 44 cents, or 2 percent, to 21.54 euros, even as the company said second-quarter tourism profit climbed 8 percent as German consumers spent more on vacation packages to Spain.

To contact the reporter on this story: Chris Fournier in Frankfurt at Cfournier3@bloomberg.net

Last Updated: August 11, 2005 07:23 EDT