European Stocks Fall as Euro-Area Growth Misses Estimates

European stocks fell the most in a month as first-quarter euro-area economic growth missed forecasts, while companies including Deutsche Post AG and Thomas Cook Group Plc (TCG) slid after posting results.

Deutsche Post lost the most in two years after first-quarter earnings before interest and taxes missed projections. Thomas Cook sank the most in more than two years after saying sales in the first-half retreated 6.6 percent. Cie. Financiere Richemont (CFR) SA gained the most in a year after the maker of Cartier jewelry said it will raise its dividend. Hennes & Mauritz AB climbed the most since September after reporting higher-than-forecast sales for April.

The Stoxx Europe 600 Index dropped 0.9 percent to 338.5 at the close of trading. European equities rose to a six-year high on May 13 amid merger-and-acquisition activity and better-than-estimated earnings in the region.

“We’re lacking positive news momentum,” Otto Waser, chief investment officer at R&A Research & Asset Management AG in Zurich, said by telephone. “We had disappointing GDP growth figures from the euro zone. Earnings are a very mixed picture.”

The volume of shares changing hands in Stoxx 600-listed companies was 44 percent higher than the 30-day average, according to data compiled by Bloomberg.

The euro-area economy grew 0.2 percent in the first quarter from the previous three months, missing the average analyst estimate of 0.4 percent, according to figures released today by the European Union’s statistics office in Luxembourg. Dutch GDP fell 1.4 percent, the sharpest contraction in the euro area. The Italian and Portuguese economies shrank 0.1 percent and 0.7 percent, respectively, while French growth missed estimates.

Company Earnings

Some 22 companies in the Stoxx 600 post results today. Profit for members of the equity gauge will grow 8.4 percent this year on average, according to analyst estimates compiled by Bloomberg.

National benchmark indexes retreated in all but two of the 18 western European markets today. The U.K.’s FTSE 100 slipped 0.6 percent, Germany’s DAX lost 1 percent and France’s CAC 40 slid 1.3 percent.

Equities extended declines after a Federal Reserve report in Washington showed industrial production in the U.S. unexpectedly fell in April. Output at factories, mines and utilities decreased 0.6 percent, missing the median forecast in a Bloomberg survey for an unchanged reading.

Separate data from the Labor Department showed jobless claims dropped by 24,000 to 297,000 in the week ended May 10, the fewest since May 2007. The median estimate of economists surveyed was for 320,000.

Deutsche Post

Deutsche Post lost 5.2 percent to 26.22 euros. Europe’s largest mail service reported first-quarter earnings before interest and taxes of 726 million euros ($991 million), missing the 752 million euros projected by analysts.

Thomas Cook tumbled 13 percent to 156.1 pence. Europe’s second-largest tour operator said sales in the first-half retreated 6.6 percent to 3 billion pounds ($5 billion). The company also reported a loss before interest and taxes of 187 million pounds, compared with a loss of 198 million pounds a year earlier.

Dixons Retail Plc (DXNS) slumped 10 percent to 45.7 pence, its biggest drop since June. The largest U.K. consumer-electronics retailer agreed to merge with Carphone Warehouse Group Plc. Dixons shareholders will receive 0.155 of a share in the combined entity, to be called Dixons Carphone Plc, for each Dixons share, the companies said today.

Carphone Warehouse tumbled 8.1 percent to 301.3 pence, its largest decline in more than two years.

KBC Groep NV (KBC) fell 5.8 percent to 42.36 euros. Belgium’s biggest bank by market value said first-quarter adjusted total income reached 1.58 billion euros, missing the 1.7 billion euros that analysts estimated.

Richemont Rises

Richemont advanced 4.2 percent to 90.95 Swiss francs. The Geneva-based luxury-goods maker said it plans to raise its dividend 40 percent to 1.40 francs a share, exceeding the Bloomberg forecast of 1.15 francs. Richemont also said operating profit was little changed at 2.42 billion euros in the 12 months through March.

H&M climbed 3.7 percent to 284.20 Swedish kronor. Europe’s second-biggest clothing retailer said total revenue including value added tax in April jumped 17 percent from a year earlier in local currencies. That topped the 10.1 percent gain estimated in a survey of analysts by SME Direkt.

Bollore SA added 1.9 percent to 471 euros, its highest price since at least 1989. The French holding company with interests in banking, media and shipping will join the MSCI France Index, according to a statement from the index provider. The change will take place after the close of trading on May 30.

To contact the reporter on this story: Inyoung Hwang in London at ihwang7@bloomberg.net

To contact the editors responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net Alan Soughley, Will Hadfield

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