European Stocks Rise as Unilever, Sanofi Beat Estimates
European stocks climbed for a second day as companies including Unilever and Sanofi (SAN) posted results that exceeded analysts’ estimates.
Unilever gained 2.6 percent, its biggest advance in almost three months, after quarterly sales grew faster than analysts had projected. Sanofi rose 1.4 percent after France’s largest drugmaker reported third-quarter profit that retreated less than analysts had predicted. Daimler AG (DAI) slid 2.7 percent after the world’s third-largest luxury carmaker abandoned its profit- margin target for 2013.
The Stoxx Europe 600 Index increased 0.3 percent to 270.23 at the close in London as a report showed the U.K. moved out of recession in the third quarter. The gauge has still declined 1.4 percent so far this week as company earnings missed estimates. The equity benchmark has risen 16 percent from a June 4 low as the European Central Bank and the Federal Reserve announced open-ended bond-buying programs.
“With Europe still in recession, expectations of earnings have been moderate, so many companies beat estimates,” said Manish Singh, who helps oversee $2 billion of assets as head of investment at Crossbridge Capital in London. “Perhaps investors are ready to wait for things to get better. On the U.K. gross domestic product, the initial cheer may be short lived. We won’t have an Olympics every quarter and we need more confirmation to feel the U.K. is out of recession.”
Thirty-four companies in the Stoxx 600 post earnings today, according to data compiled by Bloomberg. Of the 89 companies that have reported profit so far this season, 47 have beaten estimates, while 41 have missed them.
The U.K.’s economy expanded in the third quarter more than predicted, rebounding from a recession. Gross domestic product climbed 1 percent from the second quarter, when it dropped 0.4 percent, the Office for National Statistics said. Economists in a Bloomberg survey had predicted a 0.6 percent increase.
In the U.S., a Commerce Department release showed orders for durable goods rose 9.9 percent in September. They dropped a revised 13.1 percent in August. Economists had forecast a 7.5 percent increase.
A Labor Department report showed that jobless claims declined to 369,000 in the week ended Oct. 20, following a revised 392,000 a week earlier. The median estimate of economists surveyed by Bloomberg had called for 370,000.
National benchmark indexes declined in 10 of the 18 western-European (SXXP) markets. The U.K.’s FTSE 100 was unchanged, while France’s CAC 40 retreated 0.4 percent. Germany’s DAX advanced 0.1 percent.
Unilever gained 2.6 percent to 28.45 euros, its largest rally since July, after the world’s second-biggest consumer- goods company said third-quarter revenue grew 5.9 percent. That beat the 5.3 percent increase estimated by analysts in a Bloomberg survey.
Sanofi climbed 1.4 percent to 67.04 euros after the company reported a 7.4 percent decline in business net income, which excludes some costs, to 2.22 billion euros ($2.9 billion). That exceeded the 2.01 billion-euro estimate of 14 analysts compiled by Bloomberg. The drugmaker also said earnings will drop this year less than it had forecast.
Debenhams Plc (DEB) jumped 9.2 percent to 119 pence, the highest price in five years, after saying it will continue to buy back shares next year. The U.K. department-store retailer raised its target for online sales to 600 million pounds ($967 million) from 500 million pounds and said it plans to have a total of 150 franchise stores within the next five years.
Daimler slipped 2.7 percent to 36.79 euros after the German carmaker lowered its 2012 forecast and said it will no longer reach its 2013 operating-margin targets because of tougher market conditions. Daimler said late yesterday that full-year Ebit will decrease 11 percent to 8 billion euros. The owner of the Mercedes-Benz brand had said it would match last year’s 9 billion euros.
WPP Plc (WPP) fell 2.3 percent to 789.5 pence after cutting its full-year sales growth target for the second time in two months. The world’s largest advertising company said revenue, excluding currency fluctuations and acquisitions, will grow 2.5 percent to 3 percent, compared with a previous forecast of about 3.5 percent.
France Telecom SA (FTE) slid 5.2 percent to 8.83 euros after saying it will pay a dividend of 80 cents in both 2012 and 2013. The former telecommunications monopoly made a payout of 1.40 euros in 2011.
Logitech International SA (LOGN) plunged 16 percent to 6.92 francs, its biggest tumble in nine years, after the world’s largest maker of computer mice forecast lower sales and operating profit in the second half of the current fiscal year than a year earlier.
To contact the editor responsible for this story: Andrew Rummer at email@example.com