May 10 (Bloomberg) -- European stocks gained for the fourth straight week, as a rally after European Central Bank President Mario Draghi said policy makers are ready to take action to offset disappointing corporate earnings.
Siemens AG added 2.7 percent as it outlined plans to cut costs in an overhaul that includes spinning off its hearing-aid unit. Vestas Wind Systems A/S rallied 9.2 percent as it posted an unexpected quarterly profit. Petrofac Ltd. tumbled 20 percent as it predicted earnings that missed analysts’ estimates. Balfour Beatty Plc sank 22 percent as its chief executive officer quit and the company cut its earnings forecast.
The Stoxx Europe 600 Index added 0.2 percent this week to 338.54. The measure reached a six-year high on May 8 after Draghi’s announcement. That day, the central bank left its benchmark interest rate unchanged.
“Draghi continues to underpin the market,” Lex Van Dam, a fund manager at Hampstead Capital LLP in London, said in an e-mail. “Earnings weren’t great, but they weren’t a disaster either. Investors can take comfort from the fact that from a technical perspective, we continue to make progress.”
Draghi’s comments prompted economists from Morgan Stanley to ABN Amro Bank NV to predict the ECB will cut it key rate to 0.10 percent from the record low of 0.25 percent when policy makers convene on June 5.
“The Governing Council is comfortable with acting next time, but before we want to see the staff projections that will come out in the early June,” Draghi said at a press conference in Brussels on May 8. “There wasn’t a decision today. It’s a preview of the discussion we will have next month.”
National benchmark indexes rose in 10 of the 18 western-European markets this week. France’s CAC 40 added 0.4 percent, while Germany’s DAX advanced 0.3 percent. The FTSE 100 lost 0.1 percent during the shortened holiday week.
Siemens climbed 2.7 percent. Europe’s largest engineering company is turning itself around with a new setup designed to save 1 billion euros ($1.38 billion) in annual costs, it said. Siemens plans to list its hearing-aid unit and agreed to buy some Rolls-Royce Holdings Plc energy assets for $1.3 billion.
Vestas rose 9.2 percent. The world’s biggest wind-turbine maker posted profit of 2 million euros in the first quarter from a loss of 151 million euros a year earlier. The average analyst estimate called for a net loss of 17.1 million euros.
Enel SpA gained 3.2 percent. Italy’s biggest utility said adjusted net income fell to 782 million euros from 852 million euros a year earlier. Analysts surveyed by Bloomberg had predicted 750 million euros.
Henkel AG advanced 7.4 percent. The German maker of Persil washing detergent said first-quarter earnings before interest and taxes, excluding one-time items and restructuring costs, climbed 3.3 percent to 619 million euros on higher demand from emerging markets such as China, Russia and Turkey. Analysts had predicted 600.8 million euros.
Petrofac tumbled 20 percent. The U.K.’s largest oil-services company predicted 2014 profit of $580 million to $600 million, lower than the $667.3 million average estimate in a Bloomberg survey of analysts.
Balfour Beatty slumped 22 percent. Andrew McNaughton stepped down as CEO after 13 months on the job. The British construction company forecast 2014 pretax profit of 145 million pounds ($244.3 million) to 160 million pounds, compared with adjusted pretax profit of 187 million pounds last year.
Fiat SpA tumbled 14 percent. The Italian automaker said Ebit and one-time items fell to 622 million euros in the first quarter, trailing the 854 million euros that analysts had estimated in a Bloomberg survey.
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