Most German Stocks Retreat; K+S, RWE Decline as Shares of Siemens Rises

Most German stocks fell as declines in K+S AG and RWE AG shares overshadowed a rise in Siemens AG.

Siemens surged 2.6 percent as the company plans to boost its dividend more than analysts had predicted, after resurging economic growth bolstered manufacturing at Europe’s largest engineering company. K+S AG, Europe’s largest potash supplier, fell 2.6 percent after the company’s sales outlook for 2011 disappointed analysts. Sky Deutschland AG advanced 12 percent as third-quarter sales rose.

The DAX gained less than 0.1 percent to 6,723.41 at the 5:30 p.m. close in Frankfurt, with almost two stocks falling for each one that rose. The measure increased 2.3 percent last week as the U.S. Federal Reserve announced that it will buy a further $600 billion of bonds in an attempt to bolster the world’s largest economy. The broader HDAX Index slipped 0.1 percent today.

“The earnings season as a whole was very strong,” said Markus Wallner, a senior equity strategist at Commerzbank AG in Frankfurt. “Analysts are looking deep into the numbers and some companies are getting punished if they don’t quite match the numbers. It’s also more difficult for companies in the third quarter as analysts have raised their estimates compared to the first and second quarters. The DAX can still reach 6,900 by the end of the year.”

About 71 percent of the 28 companies on the DAX that have announced results since Oct. 7 have beaten analyst estimates for per-share income, according to data compiled by Bloomberg.

Siemens, K+S

Siemens gained 2.6 percent to 85.34 euros, the highest close since March 2008. The company’s proposed dividend payout of 2.70 euros compares with an estimate of 2 euros a share in a Bloomberg survey. For the last three years, Siemens had kept its dividend at 1.60 euros.

The Munich-based company said today that sales in the fiscal fourth-quarter through Sept. 30 rose 7.7 percent to 21.23 billion euros ($29.27 billion). Siemens had a loss from a writedown at its health-care unit.

K+S lost 2.6 percent to 50.73 euros, the biggest decline since June. Sales volumes of potash and magnesium products will just exceed 7 million tons next year, up from the expected 6.7 million tons to 6.9 million tons in 2010, Kassel-based K+S said in a statement. The company reported third-quarter net income of 76.8 million euros, up from 3.7 million euros.

“No surprise, but sobering 2011 guidance,” said Wolfgang Fickus, an analyst at WestLB AG.

RWE Declines

RWE, Germany’s second-biggest utility, declined 1.5 percent to 50.25 euros, the largest retreat in a month.

“The U.K. division showed disappointing results,” Mario Kristl, a Frankfurt-based analyst at DZ Bank AG, wrote in a report today. “RWE should also increase its cost savings target.” The analyst said he expects “a decrease in operating result of around 9 percent” in the financial year 2011.

The profit gauge, which RWE uses to calculate its dividend, was 3.2 billion euros ($4.4 billion) compared with 2.9 billion euros in the same period a year earlier, the Essen, Germany- based company said in a statement on its website today.

Sky Deutschland jumped 12 percent to 1.26 euros. The pay- television operator said sales in the third quarter rose to 243.2 million euros from 208.5 million euros in the year-earlier period. The loss after tax in the period narrowed to 89.3 million euros from 116.7 million euros.

Fielmann AG added 1.4 percent to 67.13 euros, erasing yesterday’s 1 percent drop. Europe’s largest chain of opticians reported that third-quarter net income rose to 36.6 million euros from 32.5 million euros. Sales increased, the company said in an e-mailed statement.

United Internet

United Internet AG sank 9.2 percent to 11.78 euros, the largest decline since March 2009. The Internet service provider said nine-month pretax profit fell 8.3 percent because of “scheduled depreciation” on Freenet AG’s digital subscriber- line customer base, which was acquired last year.

Conergy AG slumped 9.9 percent to 43 euro cents as the solar company reported a 4.3 million-euro net loss in the third quarter. Solarworld AG lost 7.1 percent to 8.90 euros after saying the German market has been slightly slower since the third quarter and the company will need up to 300 million euros to boost its output.

Rational AG tumbled 6 percent to 153.25 euros. The maker of industrial ovens was downgraded to “underperform” from “outperform” at CA Cheuvreux, which said it recommends “investors take profits and await more attractive entry levels.”

DZ Bank AG cut its recommendation on the stock to “hold” from “buy.”

To contact the reporter on this story: Julie Cruz in Frankfurt at jcruz6@bloomberg.net.

To contact the editor responsible for this story: David Merritt at dmerritt1@bloomberg.net.

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