European Stocks Climb as EADS, Bouygues Top Estimates
European stocks climbed, rebounding from the lowest level in more than two weeks, as companies from European Aeronautic, Defence & Space Co. to Bouygues (EN) SA reported results that beat analysts’ estimates.
EADS rallied to a record as the parent company of Airbus also forecast profit will rise in 2013. Bouygues surged the most in 18 months as the French builder predicted profitability at its phone division will increase. Kabel Deutschland Holding AG fell 3.7 percent after Vodafone Group Plc (VOD) was said to have put on hold potential takeover plans.
The Stoxx Europe 600 Index (SXXP) gained 0.9 percent to 287.17 at the close of trading after earlier falling as much as 0.3 percent. The gauge dropped 1.3 percent yesterday to the lowest level since Feb. 7 after Italy’s election stalemate sent the country’s borrowing costs to a four-month high.
“We remain overweight on equities,” Andrew Garthwaite, a global equity strategist at Credit Suisse Group AG in London, wrote in a report. “Our tactical indicators for equities have been consistent with a period of consolidation, but we would use this as a buying opportunity. Global earnings revisions have recently started to improve, in line with stronger economic momentum.”
Economic confidence in the euro area increased more than economists forecast in February, adding to signs that the 17- nation currency bloc may be emerging from a recession. An index of executive and consumer sentiment rose to 91.1 from a revised 89.5 in January, the European Commission said. Economists had forecast an increase to 89.9, according to the median estimate in a Bloomberg survey.
In the U.S., orders for durable goods excluding transportation gear climbed in January by the most in a year. Bookings for equipment meant to last at least three years minus demand for things such as aircraft, which is often volatile, climbed 1.9 percent, exceeding the median forecast of economists surveyed by Bloomberg and the most since December 2011, Commerce Department data showed. Contracts to purchase previously owned U.S. homes climbed more than forecast.
Italy’s FTSE MIB rose 1.8 percent as the country sold 6.5 billion euros ($8.52 billion) of securities at its first bond auction since the country’s inconclusive elections.
EADS (EAD) advanced 6.5 percent to 37.14 euros, the highest price since the shares started trading in July 2000. The company reported a 68 percent gain in full-year earnings before interest, taxes and one-time items to 3 billion euros, beating the average analyst estimate of 2.57 billion euros.
EADS also forecast operating profit will rise to 3.5 billion euros this year as its Airbus division lifts output and demand for commercial helicopters rebounds.
Bouygues rallied 13 percent to 21.96 euros, the biggest jump since August 2011. France’s second-largest builder reported a 41 percent drop in 2012 profit to 633 million euros as its phone unit suffered from competition. That still beat the average analyst estimate of 584 million euros.
Of Stoxx 600 companies that have posted earnings since Jan. 8, about 51 percent have exceeded analysts’ profit estimates, while 62 percent have topped revenue forecasts, data compiled by Bloomberg show.
Swiss Life Holding AG (SLHN) jumped 8.7 percent to 151.90 francs, the largest increase since March 2009, as Switzerland’s biggest life insurer reported higher operating profit in its home market and France.
Bwin.Party Digital Entertainment Plc (BPTY), the gambling company that has a partnership with Atlantic City’s top-grossing casino, soared 8.9 percent to 150 pence, after New Jersey Governor Chris Christie signed legislation authorizing online gambling in the state. 888 Holdings Plc climbed 4.3 percent to 156.75 pence.
Kabel Deutschland slid 2.55 euros to 67.03 euros after three people familiar with the matter said Vodafone put on hold plans to approach Kabel about a takeover bid after leaks of a potential offer complicated internal discussions.
Vodafone, which had intended to contact Kabel Deutschland after the cable provider’s earnings report last week, no longer has a timeframe for a possible approach, the people said. The U.K. company’s shares climbed 2 percent to 165.1 pence.
Royal Imtech NV (IM) sank 11 percent to 8.65 euros, its lowest price since May 2005, after it announced a 500 million-euro rights offer to help cut debt. The Dutch provider of 2012 London Olympics stadium infrastructure also said it will write down about 300 million euros on Polish and German projects.
Jeronimo Martins (JMT) SGPS SA sank 6.1 percent to 15.12 euros, the biggest slump in four years, as Portugal’s largest retailer reported earnings that missed forecasts amid slowing consumption in its home market.
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