European Movers: Technip, SAP, Nokia
DSG INTERNATIONAL (DSGI.L) was down £0.12 to £1.24... Latest like-for-like sales up 5%, Italy weak - The company says for 24 weeks ended 13 October total Electricals like-for-like sales up 4%; Computing like-for-like sales up 1%; total like-for-like sales up 5% Adds Italy performance remains disappointing with a weak consumer backdrop continuing to affect sales growth. The company says while first half profits will be down year-over-year, the next 3 months include the important Christmas peak season, a period in which over half of the annual profits are generated.
ITV (ITV.L) was down £0.02 to £0.99... To take £18 million charge over PRS activity - the company says will take an exceptional operating charge of £18 million in fiscal 2007 associated with PRS activity. The broadcaster announced new measures following the Findings of the Deloitte Review and ITV Investigation into premium rate services (PRS) within TV programs. the company is offering reimbursement of about £7.8 million and will donate any uncliamed funds to charity. Adds the review identified key areas of failure in the way in which the company integrated PRS into its programming and is bringing telephony service provision in-house on programs made by ITV Productions. The company has agreed a deal with Microsoft for internet coverage of 'I'm a Celebrity Get Me Out of Here', as the broadcaster tries to build its web audience, the FT writes.
LAGARDERE (LAGA.PA) was up €1.28 to €59.05... Denies report it may delist the company from Euronext - the company has denied the French magazine Le Nouvel Observateur's report that the company could delist its shares from Euronext. The weekly says CEO Arnaud Lagardere feels the limited partnership structure of the company isn't sufficient to protect his interests. Adds that Arnaud Lagardere is mulling a delisting through an acquisition of 40% of the group by Qatar and other friendly shareholders.
VALEO (VLOF.PA) was down €1.61 to €39.47... posted third quarter07 net loss of €40 million - the company reports third quarter07 total operating revenues of €2.245 billion, +4.3%; gross margin of €340 million, +5.6%; operating income of €64 million, +28.0%; net loss of EUR 40 million vs €7 million profit in third quarter06; and basic EPS from core activities of €0.16 vs €0.12 in third quarter06. the company says it intends to continue to progress in an environment in which global automotive production will be less sustained than in third quarter.
TECHNIP (TECF.PA) was down €2.68 to €61.22... Exane downgrades to underperform from outperform and cuts target to €65 from €66. The broker believes the expected margin recovery is priced in while there is still a risk of disappointment for the next six months as some onshore projects remain challenging. UBS ups target to €66 from €61 on higher earnings forecasts. The broker increases 2007 EPS of c.5%, predominantly from higher subsea profits. Raises forecast for 2010 net income to €420 million from €372 million, still well below the company 's target of €480 million. Keeps neutral. Cheuvreux lifts target to €60 from €56 as broker believes taxation should sharply decrease. Raises EPS estimates by 6% in 2008 and 2009. Keeps underperform. Thinks inconsistency between divisions target and group target creates confusion.
MAN (MANG.DE) was up €2.75 to €121.96...
Wallenberg and VW reach bid agreement - Dagens Industri reports that VW and the Wallenberg family, both major owners of Scania, have reached an agreement that Scania will bid for MAN. The newspaper says a court case of VW's ownership structure is scheduled for 23 October and will decide the outcome of the planned bid. It adds that if Ferdinand Piech, VW's chairman, gains control of VW, the bid will proceed. Meanwhile, the company is holding an investor conference in San Francisco with WestLB today.
SAP (SAP) was down €1.31 to €38.29... Merely maintained guidance weighs - the company 's third quarter software revenues met expectations, coming in 11% higher year-over-year at €715 million. Disappointing for some, the company 's full-year guidance was merely maintained. Also, lack of clear insight into the company 's acquisitions plans weighs. UniCredit notes that the company 's operating trends are okay, and reckons this is a stock to own in fourth quarter. See Broker Views & News - Germany. Cheuvreux lifts target to €41 from €38, reiterating underperform.
DEUTSCHE POST (DPWGn.DE) was down €0.57 to €20.99... Concerns about third quarter results come to the fore - Trader notes that due to several one-offs in letter, express and service, the quarterly operating profit estimate of €900 million might be €100 million too high versus high basis 2006 €1.030 billion. Adjusted, this points to underlying EBIT growth of 8%, considered a tad on the soft side.
LOTTOMATICA was down €1.09 to €24.76... Goldman removes from Pan-Europe Conviction Buy List - Lowers target to EUR 33.20 from €35.00. With the deteriorating US$/EUR exchange rate creating a further headwind for the company through third quarter/fourth quarter07, modestly reduces 2007 EBITDA estimate. Retains buy rating on the shares. Shares in the company are under pressure on speculation the group be lowering guidance. One source notes that EBITDA forecasts for 2008 may be too ambitious. the company is understood to be on roadshow in London today.
SLIGRO FOOD was down €4.20 to €26.60... Disappointing results at supermarket operations as the company reports third quarter like-for-like sales growth of 4.2%, with nine months sales at 5.1%. For fourth quarter, the company expects that the operating result will remain under pressure at food retail, and that this cannot be compensated by the improvement at foodservice.
NOKIA (NOK) was up €0.65 to €26.25... third quarter EPS beat high est, loss in NSN not as bad - third quarter sales comes in at €12.9 billion vs €13.2 billion forecast and EPS at €0.40 vs €0.34 forecast. Nokia Siemens Networks (NSN) third quarter EBIT loss comes in at €120 million vs €213 million forecast. Mobile Phones unit third quarter EBIT margin comes in at 22.6% vs 20.4% forecast. the company sold 111.7 million mobile phones in third quarter, vs 107.7 million forecast, with an ASP of €82 vs €89 forecast. Mobile phone market share reaches 39% vs 38.9%.
SCANIA was down SEK4.00 to SEK175.50... Investor and VW agree on MAN bid (press) - Dagens Industri speculates that VW and Wallenberg's Investor, both major shareholders in the company , have agreed the company should launch a takeover bid for German rival MAN. Ferdinand Piech, chairman for both VW and MAN, plays a key roll, the newspaper argues, as an EU court will decide on Lower Saxony's deciding vote in VW next week. The expected verdict is that Porsche, also controlled by Piech, will gain power over VW, giving an opening for the company (controlled by VW), to launch a bid for MAN.
ELECTROLUX was down SEK4.75 to SEK144.25...
Rumours of profit warning - Market rumours suggest the company , which is heavily exposed to the US market, will put out a profit warning. the company is schedueld to report third quarter earningS on 22 October and consensus looks for net sales of SEK26.536 billion vs SEK26.087 billion year-over-year, adjusted EBIT of SEK1.232 billion vs SEK1.136 billion year-over-year, pretax profit of SEK1.016 billion vs SEK684 million year-over-year, net result of SEK736 million vs SEK440 million year-over-year and EPS of SEK2.61 vs SEK1.54 year-over-year.
REPSOL YPF (REP) was up €0.82 to €26.44... Merrill upgrades to buy - Merrill Lynch upgrades to buy from neutral with EUR 32 target price. Notes the partial spin-off of YPF now looks probable in first quarter08 and the sale of the 30.8% holding in Gas Natural is finally being considered - leaving the rump business repositioned around core strengths in Iberian downstream plus focused international E&P operations. Goldman Sachs cuts target to €27.50 from EUR 28.50, neutral. Lowers third quarter07 EPS estimate by 25% to EUR 0.45, and fiscal 2007 estimate EPS by 8% to €2.19. JP Morgan trims target to €26 from €26.50, underweight. The company says the company has the weakest prospective E&P volume growth in its peer group, yet it also has one of the weakest free cash yields.
BBVA was up €0.03 to €17.18... Bid rumour / No subprime exposure - Market sources note a rumour that the company could be a bid target, with SocGen and HSBC named as possible suitors. A source says HSBC could buy the company 's LatAm operations, with SocGen interested in the rest. the company reportedly sees 10% of profits coming from the US within a year. Separately, the company 's CEO told Reuters that the company has no exposure to instruments such as US subprime mortgages, SIVs or conduits. CEO Francisco Gonzalez added that the company has no plans for further takeovers in the US.
NOVARTIS (NVS) was down CHF0.25 to CHF62.20... In focus after results, shake-up - the company reports third quarter net income of US$1.57 billion, down 12% year-over-year and shy of expectations due to a one-off charge. Sales in third quarter of US$9.6 billion were ahead of expectations, while sales in Pharma were in line at US$5.885 billion. the company confirmed its full-year outlook. the company says Thomas Ebeling will now lead the Consumer Health division and Joe Jimenez will lead the Pharmaceuticals division. Eliminates 1,260 positions in US Pharma marketing and sales organization to adapt to new product portfolio, generating annual savings of US$230 million. ABN AMRO says this is overall a decent set of figures with reassurance over guidance.
NESTLE was down CHF1.50 to CHF515.50... nine months sales in line, Polman to head Americas - the company 's nine months organic growth of 7.2% meets expectations. the company sticks with its full-year outlook. The company says its CFO Paul Polman will head Zone Americas from February 2008, and that James Singh, head of Acquisitions and Business Development, will become CFO from January 2008. Sanford Bernstein says top-line strength in third quarter, with 6.9% organic growth was a small decline from first half's strong growth levels of 7.4%, but still ahead of consensus and this should be well received by the market. The company says the announcment Polman will stay in the medium term is good news.
LOGITECH was up CHF6.08 to CHF40.60... Shares up after second quarter results, upgrade - the company reports second quarter sales up 19% to US$595 million, ahead of expectations, with operating income at US$80.4 million, up 54% year-over-year. Gross margin was 36.3%, compared to 34.5% year-over-year. the company expects to provide results below the operating income line, as well as the value of its short-term investments and shareholders equity in its balance sheet, within the next three weeks. It is increasing its year-over-year operating income growth goal from 15% to 20%. The company says fiscal gross margin is expected to be above the high end of the long-term target range of 32-34%. Cheuvreux upgrades to outperform from underperform, saying it was a record second quarter in operations.
ACTELION was down CHF9.50 to CHF61.00... Shares fall as Tracleer sales weak - the company 's third quarter net profit comes in at CHF89.09 million, a touch above expectations. However, sales of key drug Tracleer were CHF287 million vs consensus of CHF305 million. The company says this can be attributed to buying pattern variations and a weakening US$. However, Bear Stearns believes the market will assume the competitive threat of Letairis is greater than first expected. Vontobel downgrades to hold and puts target price under review.
SYNTHES was up CHF3.90 to CHF141.70... third quarter sales top expectations - coming in 15.8% higher year-over-year at US$689.2 million.
SYNGENTA was up CHF15.00 to CHF275.00... third quarter sales beat forecasts - coming in 21% higher year-over-year at US$1.71 billion.
GALENICA was up CHF22.00 to CHF494.00... Plans to make offer to buy Aspreva Pharmacueticals of Canada for US$26 per share, or US$915 million in total, reportedly.