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Swiss Stocks Decline as ABB, Lonza Results Miss Estimates

July 25 (Bloomberg) -- Swiss stocks declined the most in a week as ABB Ltd. and Lonza Group AG posted results that missed analysts’ estimates, outweighing a report that showed German business confidence rose.

ABB fell the most in more than three months after reporting that orders dropped from a year earlier. Lonza slid 3.8 percent after posting first-half sales that missed analysts’ estimates. Givaudan SA gained 1.9 percent after reporting first-half profit that beat analysts’ projections.

The Swiss Market Index slid 0.7 percent to 7,865.38 at the close of trading in Zurich. The equity benchmark has still risen 8.5 percent since June 24 and 15 percent from the beginning of this year. The broader Swiss Performance Index also fell 0.7 percent today.

“Markets are starting to realize that we’ve risen quite a bit in the short term,” Philippe Gijsels, a strategist at BNP Paribas Fortis in Brussels, said in a telephone interview. “Overall earnings are OK and economic reports are OK. Earnings disappointments could be used as an excuse to sell.”

The volume of shares changing hands in SMI-listed companies was 20 percent greater than the average of the past 30 days, according to data compiled by Bloomberg.

In Germany, the Ifo institute’s business-climate index, which is based on a survey of 7,000 executives, rose to 106.2 in July from 105.9 in June. Economists had predicted a reading of 106.1, according to a Bloomberg News survey.

ABB slid 3.1 percent to 20.78 Swiss francs. The world’s largest maker of power transformers posted net income that rose 16 percent to $763 million in the second quarter, missing the average analyst estimate of $779 million. Sales climbed 6 percent to $10.2 billion, matching the average forecast.

Credit Suisse

Credit Suisse Group AG dropped 3.3 percent to 27.47 francs after Switzerland’s second-largest bank reported declining profit at its private-banking and wealth-management business.

The lender also posted profit that climbed 33 percent to 1.05 billion Swiss francs ($1.1 billion) in the second quarter from 788 million francs a year earlier. Net income beat the 1.03 billion-franc average estimate of 10 analysts surveyed by Bloomberg.

“We had expected better results from the investment bank in view of the outperforming U.S. investment banks.” Teresa Nielsen, an analyst at Vontobel Holding AG, wrote in a note.

Lonza fell 3.8 percent to 71.85 francs, halting a three-day gain. The drug ingredients and chemicals maker reported a 6.8 percent decline in first-half sales adjusted for disposals to 1.74 billion francs, missing analysts’ estimates of 1.86 billion francs. The company said it will close a U.S. site and consider options for its wood-treatment business.

Givaudan Advances

Givaudan rose 1.9 percent to 1,289 francs. The world’s largest maker of flavorings reported first-half net income that surged 36 percent to 271 million francs, beating the average estimate by 10 analysts in a Bloomberg survey of 229 million francs. Sales gained 5.7 percent to 2.2 billion francs, meeting the average analyst projection.

Logitech International SA surged 8.6 percent to 6.67 francs, its biggest rally since April 2012. The world’s largest maker of computer mice reported a fiscal first-quarter profit of $1 million. The company posted increased sales of $478 million in the quarter and reiterated the outlook for its financial year ending in 2014.

Rieter Holding AG soared 13 percent to 182 francs, its biggest gain since September 2009. The Swiss maker of textile machinery forecast “high single-digit growth” this year compared with 2012. The company reported that first-half profit dropped 76 percent to 5 million francs and sales declined 1.9 percent to 478.1 million francs.

To contact the reporter on this story: Tom Stoukas in Athens at astoukas@bloomberg.net

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

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