Thursday's stocks in the news
From Standard & Poor's European MarketScope
LEGAL & GENERAL - Down £0.12 to £1.38... 1H op profit below ests, unveils £1bn buyback - Posts 1H EEV operating profit of £589m, +5% (vs cons £605m); interim DPS 1.87p, +7.5%; UK life and pensions PVNBP £4,472bn, +24%; Worldwide life and pensions PVNBP £4.979bn, +22%. Announces share buyback of £1bn. Says dividend growth rate is increased to 7.5%, reflecting strong cash flows and profitability.
ROLLS-ROYCE - Down £0.34 to £4.97... Citi says take profits post 1H figures - Citigroup suggest to take profits following the 1H07 figures. Broker says civil aerospace margin and aftermarket figures are disappointing. Points out that Co. is trading up 20% ytd, vs 7% for the sector, driven by multiple expansion. Suggests to sell.
Co. posts 1H underlying PTP of £380m, +17% (vs cons of £366m); order book £35.1bn, +34%; sales £3.591bn, +10% on underlying basis (vs cons of £3.658bn); DPS 4.04p, +10%. Says despite the challenges of increasing raw material costs and the effects of a weakening US$, is well placed to deliver growth in underlying profit and, before pension scheme injections, a positive cash flow in 2007.
KESA ELECTRICALS - Down £0.10 to £3.13... Strong 2Q numbers despite tough comps Announces 1H revenue growth of 7.1% in local currency, up 4.2% LFL. Says LFL Darty +4.2%; Comet +1.6%; BUT +5.8%; Other +10.9%. Says performance was driven by stronger than anticipated sales in 2Q with continued demand for digital products, against the high comps of last year, and improved sales of white goods. Expects profit for 1H to improve, and for 2H thinks consumer confidence in Continental Europe will remain solid but uncertain in the UK.
BT GROUP - Down £0.17 to £3.12... 1Q EBITDA up 3%, in line with ests - Reports 1Q EBITDA before items and leaver costs of £1.425bn, +3% (vs cons £1.42bn); revenue £5.033bn, +3% (vs cons £5bn); New wave revenue £1.815bn, +11%; EPS before items and leaver costs of 6.0p, +3%; Broadband net additions 0.5m; BT Retail's share of net additions was 38%.
RENAULT - Down €5.22 to €102.88... 1H tops consensus/JP Morgan downgrades 1H operating margin tops expectations - coming in at 3.5%. Co. confirmed its 3% target for the year as a whole. 1H gross operating income rose 22% to €722m, while revenues were down 1.4% to EUR20.56bn. In broker news, JP Morgan downgrades to neutral from overweight. Believes the stock is priced for unproven margin sustainability. Lehman ups target to €125 from €115, keeps overweight. Believes top line and earnings growth will be the most attractive of any European OEM over the next two years. UBS ups target to €92 from €72, keeps reduce. Remains cautious about volume and margin targets in Europe.
THOMSON - Down €1.85 to €12.23... 1H EBIT falls 25.6%- Co. posts 1H Core Business EBIT of €99m, down 25.6% y/y. This figure comes after a €64m one-off DVD Services restructuring cost. Consensus expectation had been nearer €114m. Net loss is €20m, up from last year's €71m loss, in part thanks to reduced financial costs.
AREVA - Down €12.24 to €793.29... Wins €6bn Chinese contract to supply two nuclear reactors.
VOSSLOH - Up €5.80 to €84.50... Ups 2007 outlook - Sees sales of around €1.14bn and EBIT of some EUR114m.
SIEMENS - Down €5.45 to €94.25... NSN charges in focus. Nokia Siemens Networks booked €905m in restructuring and integration charges in 2Q. On the broker front, ING lifts target to €110.26 from €100, reiterating hold. All in all, believes the global picture is positive as the most important news items are the VDO exit and the confirmation of good operational results. WestLB raises target to EUR 119 from €117, reiterating add. Cheuvreux cuts target to €120 from €125, sticking to outperform.
CONTINENTAL - Down €3.70 to €104.80... Broker action and comments post VDO buy - Yesterday, Co. announced that it is buying Siemens' VDO unit for €11.4bn. Merck Finck says except for the high price, the deal information was mostly positive and, therefore, it is confident it will still be value enhancing for shareholders. Rates stock buy. Saying the small capital increase doesn't change its positive view on Co., UniCredit ups target to €143 from €123 as it sticks to buy. For Sal Oppenheim's comment, see Broker
DSM - Up €1.11 to €37.72... 2Q numbers beat estimates - Co. reports 2Q net sales from cont. pperations of EUR €2.2bn, in line with expectations. 2Q EBIT comes in at €227m (before exceptional items), down 3% y/y, but higher than expected. Net profit at €47m, also higher than expected. Co. raises 2007 outlook.
ROYAL DUTCH SHELL (NL) - Down €0.52 to €28.95... 2Q CCS earnings rise 20% y/y - Co. reports 2Q CCS earnings of US$7.6bn (+20%) vs US$6.3bn y/y and higher than expected. Co. reports 2Q CCS net income of US$8.67bn, 18% higher y/y. Increases dividend by 14% to US$0.36 per share, as expected. ABN Amro analyst clean CCS net income was US$6.896bn vs consensus US$6.760bn. Adds star divisions were Oil products (R&M) and Chemicals while Exploration and Production and Gas & Power were a little disappointing. Says clean OP of US$2.731bn was 18% above consensus while clean Chemicals of US$0.494bn was also 18% ahead. Adds clean E&P of US$3.148bn was 11% down on expectations, but production (3.178mb/d) was 1% ahead of broker's forecast.
SCANIA - Down SEK21.00 to SEK160.50... 2Q earnings lag forecasts - 2Q sales comes in at SEK20.91bn vs SEK20.24bn forecast and PTP at SEK2.90bn vs SEK3.04bn forecast. 2Q order bookings comes in at 22,185 vs 16,922 y/y.
PETROLEUM GEO SERV. - Up NOK4.50 to NOK143.00... 2Q EBIT ahead of forecasts - 2Q net profit amounts to US$83.5m vs US$86m forecast, EBIT at US$131.0m vs US$125m forecast and EBITDA at US$199.2m vs US$196m forecast.
ASTRAZENECA (SE) - Down SEK9.00 to SEK358.00... 2Q profit falls, revises FY07 EPS - Posts 2Q PTP US$1.991bn, -10% (vs est of US$2.209bn); adjusted EPS US$1.19, +17%; operating profit US$1.973bn, -7% (vs cons US$2.18bn); sales US$7.273bn, +10% (vs cons US$7.170bn); 2Q Nexium sales US$1.312bn, Seroquel US$963m, +11%, Crestor US$678m, +38%. Says restructuring initiatives have been scaled up to deliver annual benefits in excess of US$900m by 2010, at a cost of US$1.6bn. Says a solid underlying financial performance puts Co. on track to deliver FY targets. Says revised guidance for 2007 EPS, including MedImmune related financing costs, is now in the range of US$3.60 to US$3.75/sh. Expects contribution from US sales of Toprol to generate EPS of US$0.04/month.
REPSOL YPF - Down €1.20 to €26.96... Weak 1H results / Citi keeps sell - Co. says 1H net profit falls 4.3% to EUR1.706bn, due to falling global oil prices. Adds EBITDA came in at €4.274bn. Says refining margins improved by 24.5%, offsetting US$ weakness. Adds E&P operating result fell to €1.282bn from €1.928bn y/y. Average sale price was US$43.35/bbl. Says R&M operating results rose 4.5% to €1.305bn. Says Chemicals operating result rose to €170m from €123m. Citigroup reiterates sell following the results. Says 2Q net profit missed its forecast by 7%, and EBIT by 10%.
SANTANDER - Down €0.40 to €13.50... 1H net profit tops forecasts - Co. says 1H net profit rises 39% to EUR4.458bn, ahead of forecasts, or up 21% to €3.892bn excluding capital gains. Says revenues rose by 22% and costs by 10%, and cost-income ratio improved by 4.9pp to 44.4%. Adds NII rose 22.9% to €7.133bn.
ABB LTD - Down CHF0.20 to CHF27.50... 2Q results top expectations amid strong demand across all units and in all regions. Revenues came in at US$20.435bn, EBIT at US$1.030bn vs consensus of US$905m, net income at US$729m vs consensus US$585, EPS at US$0.32, and cash flow at US$396m.
LONZA - Down CHF1.00 to CHF111.40... 1H net profit rises 83% to CHF146m - ahead of expectations. Biopharmaceutical sales were particularly strong.
OERLIKON - Down CHF47.00 to CHF550.00... Secures order from Taiwan's CMC Magnetics - Co. announced today it has signed a contract with Taiwan's CMC Magnetics Corp. for the supply of a 40-MWp thin-film solar cell production plant. Says this deal marks its first major order in Asia-Pacific and further highlights customer confidence in the thin-film solar global market leader's technology.