Peugeot Citroen Falls on Weak Results
From Standard & Poor's European MarketScope
PSA Peugeot Citroen was down €0.65 to €51.00 after reporting weaker-than-expected first half results. The company's net profit was down to €681 million, compared to a median forecast of €781 million. First-half revenues of €29.01 billion were up 1.6%. The company said that higher material costs, and a €62 million charge for job cuts hit the net numbers.
Luxury goods group LVMH Louis Vuitton Moet Hennessy was up €0.95 to €69.65 as brokers raised their targets after the company's first half results. JP Morgan raised its fair value to €72 from €68 and kept its overweight rating after the company reported first half consolidated sales of €6.17 billion, up 12% on organic terms. The company confirms guidance of increase in operating income for fiscal-year 2005. Merrill Lynch raised its target to €74 compared to €68 and kept buy rating. The brokerage Cheuvreux also increased its target to €77 from €70 and kept its outperform rating. Separately, the company ends contracts with Brown-Forman, its US importer of the Glenmorangie brands and representative of those brands in Canada, Continental Europe, and certain Asian countries. The company said that the brands will now be distributed though its own companies in all the markets
Chipmaker STMicroelectronics was up €0.23 to €14.83 ahead of its results report tonight, after the U.S. close. The consensus is expected the second quarter 2005 net sales of $2.15 billion. The company's stocks are well bid ahead of the report on strong quarterly earnings and guidance from Texas Instruments. This outweighs the worse-than-expected third-quarter operating loss from Germany's Infineon.
Renault was down €0.95 to €75.80 after Nissan reported net profit down 14% to 105.7 billion Japanese yen as the group wrote down value of assets to comply with new accounting rules. Renault is reporting its own first-half 2005 results tomorrow. First-half net profit is seen up 21% at €1.83 billion, according to the median estimate of a Bloomberg survey.
BP was down £0.06 to £6.37 after a strong recent run as the company reported in-line results with second-quarter replacement cost net profit up 29% to $4.981 billion compared to $3.873 billion year over year. The figure includes a non-operating charge of $826 million including a $700 million charge for fatality and personal injury compensation in the Texas City blast. The group also announced a second-quarter dividend of $0.08925 per share and added that it forecasts share buybacks to be at least $6 billion in the second half of 2005, with capital expenditures to be around $14.5 billion for 2005 and $15 billion in 2006.
Reuters was down £0.29 to £3.84 as one trader pointed to a higher than expected capital expenditure charge of £150 million for 2006 and 2007, compared to £100 million forecast. Earlier, the company reported second quarter recurring revenue of £547 million, up an underlying 0.4%. Adjusted earnings per share were 6.7 pence, up 10%. The group saw positive net sales every month in the first half of 2005 and said the Fast Forward program is delivering its goals of business transformation and £440 million annualised cost savings in 2006.
Confectionary and drinks maker Cadbury Schweppes was up £0.11 to £5.53 after the company reported first half pre-tax profit of £370 million, up 5.7% and revenue of £3.127 billion, up 6%. The company expects second-half margins to benefit from increased cost savings and expects to deliver within goal ranges for the fiscal year.
Vodafone was up £0.03 to £1.49 after the bank ING said that the company reported solid key performance indicators for the quarter ending June 2005. ING highlighted 8.6% organic growth in proportionate mobile revenue compared with its expectation of 9.0%. The bank Exane BNP-Paribas increased its target to £1.70 and keeps outperform, saying that the company's key performance indicators were much stronger than expected.
Infineon was up €0.07 to €8.31 even as the company saw its fiscal third-quarter operating loss widen to €234 million, missing analysts' estimates. The figure includes a charge of €81 million, mainly in connection with the phasing out of a plant in Munich and impairment charges for the communications unit. The company said that it is comfortable with inventory levels, expects capital expenditures in fiscal 2005/06 to be no higher than this year's expenditure, six to eight more quarters of losses in some key units and sees double-digit charges for Munich and Malaysian plants throughout fiscal 2005/06. Reiterating its reduce rating, Dresdner Kleinwort Wasserstein said that it remains cautious on the company and prefers peer ASML Holdings.
Drugmaker Schwarz Pharma was up €0.79 to €39.86 as the company lifted its sales forecast for this year as second-quarter sales of €250.5 million were ahead of expectations.
Porsche was down €4.65 to €657.85 on day two of an analyst meeting in Cologne today.
Banca Populare Italiana was down €0.25 to €8.38 as Italian prosecutors seized 40% of the shares held by the company and allies in Banca Antonveneta, citing stock price manipulation, the Italian press reports. The operation prevents the company and allies from using their voting rights and possibly hands ABN Amro a lifeline in the battle for control of Antonveneta. Meanwhile, Antonveneta's shareholder meeting, which has been postponed until tomorrow, will see again ABN Amro acting as majority shareholder. Banca Antoveneta was down €0.03 to €25.15 on the news.
Spanish bank BBVA was up €0.29 to €13.77 as the company announced first-half net attributable profit up 20.1% to €1.81 billion, which is above analysts' expectations. Elsewhere, the company is to form an alliance with Telefonica Moviles in order to offer banking services via mobile phones, reported the newspaper Expansion.
Roche was up 2.10 Swiss francs to 173.90 after finalizing the deal to buy biotech GlyArt $182 million. The drug maker plans to spend some 235 million Swiss francs on the Swiss biotech group, which has three cancer drug candidates in pre-clinical trials and has developed technology to enhance the efficacy of antibodies.
Luxury goods maker Richemont was up 1.10 Swiss francs to 46.05 francs, as the group's shares advanced following peer LVMH's encouraging first half results. French-based LVMH reported better-than-expected second quarter and first half figures.