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European Stocks Advance for Second Day; Heineken Rallies

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Feb. 13 (Bloomberg) -- European stocks advanced for a second day, erasing an earlier drop, as companies from Heineken NV to PSA Peugeot Citroen reported better-than-estimated results and euro-area industrial output rose more than forecast.

Heineken, the world’s third-largest brewer, rallied to a record. Peugeot climbed the most in more than a month after France’s biggest automaker reported a narrower operating loss than predicted. Kabel Deutschland Holding AG jumped to its highest price as Vodafone Group Plc was said to consider a bid for Germany’s largest cable provider. Societe Generale SA slid 3.6 percent after posting a wider-than-estimated loss.

The Stoxx Europe 600 Index rose 0.4 percent to 288.27 at the close of trading, after dropping as much as 0.3 percent. The gauge has gained 3.1 percent this year as U.S. lawmakers agreed on a budget avoiding tax increases and spending cuts that had threatened to push the world’s largest economy into a recession.

“Considering the fact that there haven’t been too many earnings disappointments, we’re already thinking about what will happen next quarter,” said Pierre Mouton, a fund manager at Notz Stucki & Cie., which oversees $6 billion in Geneva. “The macro economy is improving. In Europe things are moving in the right direction. We’re pretty positive on stocks. There is a good possibility that companies can beat expectations next quarter.”

About 54 percent of western European companies that have reported earnings since Jan. 8 beat analysts’ projections for profit, according to Bloomberg data. Fifty-one percent exceeded revenue forecasts.

The volume of shares changing hands in companies listed on the Stoxx 600 was 14 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.

Dividend Rights

AstraZeneca Plc, BP Plc, Royal Dutch Shell Plc and Sage Group Plc traded without the right to their latest dividend today, wiping 0.21 points from the Stoxx 600, data compiled by Bloomberg show.

National benchmark indexes rose in 16 of the 18 western European markets. France’s CAC 40 and the U.K.’s FTSE 100 climbed 0.3 percent, while Germany’s DAX added 0.7 percent.

Euro-area industrial production increased more than economists forecast in December. Factory production in the 17-nation currency bloc rose 0.7 percent from November, when it declined a revised 0.7 percent, the European Union’s statistics office in Luxembourg said today. Economists had forecast a gain of 0.2 percent, according to the median of 41 estimates in a Bloomberg News survey.

Trade Agreement

In the U.S., President Barack Obama pledged to pursue a trade agreement with the European Union to expand the world’s largest economic relationship, while at the same time finishing discussions for a Pacific-region accord. Trade and investment between the U.S. and the 27 nations that make up the EU had a value of $4.5 trillion in 2011.

Retail sales in the U.S. rose in January for a third consecutive month as labor market progress helped Americans overcome an increase in the payroll tax. The 0.1 percent gain followed an unrevised 0.5 percent increase in December, Commerce Department figures showed. The advance matched the median forecast of 80 economists surveyed by Bloomberg.

Heineken added 5.7 percent to 54.93 euros, its highest price since at least October 1989. Earnings before interest and taxes, excluding some items, rose to 2.9 billion euros ($3.9 billion) from 2.7 billion euros a year earlier, the maker of Amstel lager and Strongbow cider said. That beat the median estimate for profit of 2.85 billion euros.

Peugeot Rallies

Peugeot, Europe’s second-biggest carmaker, advanced 7.3 percent to 6.40 euros, its biggest gain since Jan. 4. The company posted a loss before interest, taxes and one-time items of 576 million euros for 2012, down from a profit of 1.09 billion euros a year earlier. The loss was narrower than the 647 million-euro average analyst estimate.

Kabel Deutschland surged 8.8 percent to 69.17 euros, the highest price since its March 2010 initial public offering, as a person familiar with the matter said Vodafone is considering a takeover bid. Vodafone hasn’t yet contacted Kabel Deutschland about its intention, said the person, who asked not to be identified because the plan is private.

Vodafone, the world’s second-largest mobile-phone company, dropped 1.1 percent to 171.65 pence, for a third day of losses.

Societe Generale

Societe Generale declined 1.17 euros to 31.50 euros. France’s second-largest bank posted a fourth-quarter loss after writing down its stake in derivatives broker Newedge Group and setting aside 300 million euros for legal expenses. The net loss was 476 million euros, compared with a 100 million-euro profit a year earlier, the Paris-based lender said. That was wider than the average estimate for a loss of 203 million euros in a Bloomberg survey.

ING Groep NV retreated 4 percent to 6.65 euros, snapping a three-day rally. The biggest Dutch financial-services company will shed 1,400 jobs in the Netherlands and 1,000 in Belgium after saying fourth-quarter profit missed estimates and its core capital ratio fell. Net income of 1.43 billion euros missed the 1.63 billion-euro median estimate of 12 analysts surveyed by Bloomberg.

Societe Bic SA plunged 7.5 percent to 89.99 euros, its largest decline in almost 16 months. The French manufacturer of pens and pencils said profit was 263.1 million euros in 2012, below the average estimate of 270.6 million euros.

Storebrand ASA dropped 8.4 percent to 27.25 kroner, the biggest slide in more than seven months. Norway’s second-largest insurer posted profit that missed estimates and increased its guidance for reserve strengthening needed to meet new rules.

To contact the reporter on this story: Sofia Horta e Costa in London at shortaecosta@bloomberg.net

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

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