Porsche Rises on Strong U.S. Sales
From Standard & Poor's European MarketScope
Chipmaker Infineon was up €0.22 to €7.45 after the company and Philips Electronics won contracts to supply chips used in German passports. Separately, the Chinese-language paper Economic Daily News reported that the the leading DRAM vendor Samsung plans to raise DRAM prices by 3% for the first half of June. Infineon's joint-venture partner Nanaya confirmed it expects higher prices as well. The brokerage Kepler sees a more pronounced DRAM under-supply situation kicking in within the third-quarter. Kepler believes that the market is close to the DRAM pricing inflection point, which suggests investing in the company now.
Porsche was up €8.75 to €599.00, after the carmaker's sales in U.S. rose 25% in May, helped by new the 911 and Boxster models. The company sold 3,567 units from 2,858 a year earlier. The 911 model sales rose 17% to 1,089, while Boxster sales doubled to 1,051 units.
Carmaker BMW was up €0.61 to €36.62, after Citigroup upgraded the company to buy from hold and increased its target to €44 from €36 on the back of U.S. dollar strength. Separately, the company's US May car sales fell 3.1% to 26,926 units, while five-month sales rose 2% to 117,844.
Clothing maker Hugo Boss was up €0.17 to €24.95 According to The Financial Times Deutschland, the company plans to expand its production of shoes and accessories by as much as 30% this year and exceed €100 million by 2006.
Sporting goods maker Adidas was down €1.30 to €135.68, after dealers reported that Morgan Stanley placed 180,000 shares at €136. Separately, the company said it expects sales in Asia and Latin America to rise by at least double-digit amount this year, according to CFO Robin Stalker, speaking at a Deutsch Bank sponsored German business conference. Stalker said that he expects no change in outlook for the European markets, where Germany and France remain depressed.
The bank Credit Agricole was up €0.39 to €21.66. after the company posted first-quarter 2005 gross operating profit up 26% to €1.024 billon, beating the consensus forecast of €978 million. Revenue was up 9.7% to €3.233 billion, also higher than the consensus of €3.157 billion. This is the first quarter reported under International Financial Reporting Standards so that there are no comparable figures. Separately, traders note that Citigroup is placing 6 million shares in the company on behalf of AGF, which is reducing its stake to 33 million shares, from 39 million shares held previously, roughly 2.5% of the bank's capital.
Luxury goods maker Hermes was up €3.20 to €165.30, after it emerged that the company may cut its 31.5% stake in Leica after the German camera-maker announced a €23 million increase in capital. Hermes remains indecisive and awaits an explanation about Leica's strategy. Leica posted fiscal year 2004/2005 losses of €15.5 million, which was €14 million more than expected. The company also holds its annual general meeting today.
Aerospace giant Eads, parent of Airbus, was down €0.26 to €23.71 after Reuters reported that the company could change divisions as part of its re-structuring. Details remain unclear. Separately, the company's chief of finance Hans Peter Ring said Boeing could regain its place as world-leader in volume of orders, overtaking Airbus. Airbus expects to deliver between 350 to 360 units in fiscal year 2005, compared to 320 in 2004. Boeing, meanwhile, expects to deliver 320 units in 2005 and between 375 and 385 units in 2006.
LVMH Moet Hennessy Louis Vuitton was up €0.55 to €61.15 after Oddo Securities upgraded the company to buy from accumulate and raised its target to €72.0 from €64.0, noting that the fall of the euro is a catalyst for the luxury sector in general and the company in particular. The broker has modified its scenario for the U.S. dollar, estimating now an average euro rate of $1.26 compared to $1.35 previously.
Retail group Pinault-Printemps-Redoute, which also owns Gucci, was up €1.50 to €83.10 after the bank ING initiated coverage with a buy rating and target price of €95. The broker said the company has 18% upside potential, but warns of the risks inherent in the weakening dollar-to-euro ratio and International Financial Reporting Standards-related cuts.
Sugar and sweetener maker Tate & Lyle was down £0.22 to £4.63 after reporting fiscal year underlying pre-tax profit of £255 million, up from £227 million year over year and higher than a Goldman Sachs forecast of £240 million. The company noted that European sugar reform will adversely affect the future performance of the company's European Sugar and Food and Industrial Ingredients business, although it cannot quantify the consequences at this stage. Analyzing the results, Credit Suisse First Boston said that, as usual, the company's numbers came in a touch ahead of the comments made in the trading. The broker also notes that the chairman confirmed that the European Union Sugar Regime will impact the company's sugar and European starch profits.
Discount airline Ryanair was up £0.04 to £6.64 after the bank Exane BNP Paribas increased its target to €6.4 from €6.3 and kept its neutral rating, based on the new growth guidance. The broker said the fiscal year net profit of €267 million exceeds market expectations while improving yield environment is confirmed with average fares up 2% for the full year.
Mining group BHP Billiton was up £0.08 to £6.83 after the company said it has taken its shareholding in Australian miner WMC Resources to 29.46% from 16.35%. It also has access to a further 4.31% via derivative contracts. The company said it needs 50% acceptances from WMC shareholders by 9 a.m. GMT tomorrow or its 7.85 Australian dollar a share offer will lapse.
Financial services group Prudential was down £0.05 to £4.85 after saying that International Financial Reporting Standards cut profit by £15 million. While under different European accounting principles, fiscal-year operating profit was £1.24 billion compared to £1.15 billion a year ago.