Europe Stocks Fall Third Day; Carlsberg Misses Estimates

European stocks retreated for a third day as companies including Carlsberg A/S missed earnings estimates and European Central Bank President Mario Draghi said he sees risks to the euro area’s recovery.

Carlsberg slid the most since May. Telefonica SA retreated to the lowest price since August after saying its results were hurt by a pretax loss of 438 million euros ($585 million) from a foreign-currency position. Natixis SA surged the most since August 2009 amid plans to make a 2 billion-euro exceptional payment to shareholders.

The Stoxx Europe 600 Index slipped 0.2 percent to 286.76 at the close of trading, its third day of losses and longest losing streak in a month. The benchmark has still gained 2.5 percent so far this year after U.S. lawmakers reached a budget compromise. U.S. markets are closed for President’s Day.

“Earnings disappointments aren’t too much of a surprise given the weakness in the local economies, but they should stabilize later in the year,” said Norman Villamin, who helps oversee $64 billion as European chief investment officer at Coutts & Co. in Zurich. “Sentiment on global equity markets is still quite bullish, which is the primary concern right now, as everyone is on the same side of the trade. The strength of the euro against both the pound and the yen brings a headwind to euro-area growth.”

Low Volume

The volume of shares changing hands in companies listed on the Stoxx 600 was 48 percent lower than the average over the past 30 days, according to data compiled by Bloomberg.

Draghi said that while he expects economic weakness at the beginning of the year to be followed by a “very gradual” recovery later in 2013, risks remain to the economic outlook for the euro region.

“They relate to the possibility of weaker than expected domestic demand and exports, slow implementation of structural reforms in the euro area, as well as geopolitical issues and imbalances in major industrialised countries,” he told lawmakers in the European Parliament in Brussels. “These factors have the potential to dampen the ongoing improvement in confidence and thereby delay the recovery.”

Global finance chiefs signaled Japan has scope to keep stimulating its economy as long as policy makers cease publicly advocating a sliding yen. The message was delivered at weekend talks of finance ministers and central bankers from the Group of 20 in Moscow.

National Benchmarks

National benchmark index fell in 14 of the 18 western- European markets. France’s CAC 40 added 0.2 percent, while the U.K.’s FTSE 100 slipped 0.2 percent. Germany’s DAX gained 0.5 percent.

Carlsberg is among 64 companies on the Stoxx 600 scheduled to report earnings this week, according to data compiled by Bloomberg. Of those that have reported so far this reporting season, about 54 percent have topped analysts’ estimates, the data show. About 60 percent have beaten revenue projections.

Carlsberg tumbled 5.8 percent to 567.50 kroner. Fourth- quarter earnings advanced to 2.15 billion kroner ($384 million) from 1.83 billion kroner in the same period a year earlier, Carlsberg said. That compares with the 2.28 billion-kroner median estimate of seven analysts surveyed by Bloomberg.

The Danish owner of Russia’s biggest brewer forecast annual earnings before interest, tax and some one-time items will be about 10 billion kroner. It reported profit on the same basis of 9.8 billion kroner for 2012.

Telefonica slid 1.1 percent to 9.65 euros. The company, updating its finances after the currency devaluation in Venezuela, said on Feb. 15 that its 2012 results were hurt by a pretax loss of 438 million euros from its foreign-currency position in bolivars. The Madrid-based phone carrier will report its full-year 2012 results on Feb. 28.

Novozymes Downgraded

Novozymes A/S declined 2.6 percent to 187 kroner after UBS AG cut the world’s biggest maker of enzymes used in washing- machine powder to sell from neutral, saying its valuation is too optimistic given its growth targets.

Royal Imtech NV, the Dutch provider of infrastructure for stadiums at the 2012 London Olympics, dropped 2.4 percent to 9.10 euros, the lowest price since December 2005. Shares have fallen 8 percent since ABN Amro Bank NV on Feb. 15 said a rights issue is inevitable for the company.

Natixis jumped 22 percent to 3.48 euros after the investment-banking unit of France’s second-largest lender by branches said it will make a payment to shareholders after selling back stakes in its parent’s banking networks.

Natixis plans to sell holdings valued at 12.1 billion euros to French regional lenders Banques Populaires and Caisses d’Epargne, which jointly form its parent, Groupe BPCE.

Kabel Deutschland Holding AG rose 4.1 percent to 71.25 euros. Vodafone Group Plc may approach Germany’s largest cable provider, which has a market value of about 6.1 billion euros, regarding a potential takeover bid as early as next week, according to a person familiar with the matter. Vodafone lost 0.6 percent to 166.8 pence.

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

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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