U.K. Stocks Advance as GKN, ITV Sales Beat EstimatesTom Stoukas
U.K. stocks rose for a second day as companies from GKN Plc to ITV Plc reported sales that beat analysts’ estimates, while investors awaited the outcome of the Federal Reserve’s two-day policy meeting.
GKN jumped to its highest price since at least 1988 as Boeing Co. and Airbus SAS ordered more parts. ITV climbed to a record price after posting earnings per share that also exceeded analysts’ projections for the first half of 2013. Barclays Plc fell the most in 13 months after saying it will raise 5.8 billion pounds ($8.9 billion) in a rights offering.
The FTSE 100 Index added 10.7 points, or 0.2 percent, to 6,570.95 at the close of trading in London, after earlier advancing as much as 0.6 percent. The gauge has risen 5.7 percent in July as the Federal Reserve said it remains flexible on the pace of its bond-buying program. The broader FTSE All-Share Index increased 0.2 percent, while Ireland’s ISEQ Index gained 0.4 percent.
“There have been some good corporate results today and both ITV and Next stand out as two economically sensitive businesses where the outlook remains strong,” Matthew Beesley, the London-based head of equities at Henderson Global Investors Holdings Ltd. which overseas about $100 billion, wrote in a message. “For the FTSE 100 to move up from current levels, we are going to need to see good news from the other high-street banks when they report.”
The volume of shares changing hands in companies on the FTSE 100 today was 6.1 percent greater than the average of the past 30 days, data compiled by Bloomberg showed.
The Fed will announce its interest-rate decision after the close of European trading tomorrow. The European Central Bank and the Bank of England announce policy decisions on Thursday.
GKN surged 6.5 percent to 348.5 pence. The supplier of aircraft parts reported that sales gained 12 percent to 3.9 billion pounds in the first half, beating the average analyst estimate of 3.7 billion pounds. Pretax profit advanced 5 percent to 278 million pounds in the six-month period. Boeing and Airbus have increased their output to record levels, benefiting major suppliers such as GKN.
ITV rose 6.3 percent to 167 pence, the highest price since the company was formed from the merger of Granada Plc and Carlton Communications Plc in 2004. The broadcaster said first-half revenue climbed 2.3 percent to 1.31 billion pounds, beating analysts’ estimates of 1.15 billion pounds.
Earnings before interest, taxes, amortization and exceptional items jumped 11 percent to 291 million pounds, from 263 million pounds a year earlier, the company said.
Weir Group Plc gained 4.2 percent to 2,164 pence after increasing its dividend and posting first-half revenue that exceeded forecasts. The engineering company reported revenue of 1.26 billion pounds, beating the average analyst estimate of 1.24 billion pounds.
Next Plc added 2.4 percent to 5,020 pence. The U.K.’s second-largest clothing retailer increased the higher end of its profit target by 10 million pounds as it sold more summer items at full price. Full-year profit before tax will reach as high as 675 million pounds, the retailer said. It had forecast pretax profit of as much as 665 million pounds.
International Personal Finance Plc jumped 15 percent to 647 pence. The home-credit business, which offers unsecured loans to low-income households in eastern Europe and Mexico, posted first-half pretax profit that beat estimates. It also announced a share-buyback program.
Barclays slid 5.7 percent to 291.3 pence after announcing it will sell more shares than analysts had expected. The U.K.’s second-largest bank by assets also said first-half pretax profit excluding gains and losses on the bank’s own debt and compensation charges fell to 3.59 billion pounds from 4.34 billion pounds in the year-earlier period. That missed the 3.7 billion-pound estimate of 22 analysts surveyed by the company.
BP Plc dropped 3.4 percent to 451.5 pence. Europe’s second-biggest oil company reported lower profit in the second quarter as it increased the estimate of costs for the Gulf of Mexico oil spill in 2010.
Earnings adjusted for one-off items and inventory changes fell to $2.7 billion from $3.6 billion, the company said. That missed the $3.4 billion average prediction of 13 analysts in a Bloomberg News survey.
African Barrick Gold Plc retreated 4.6 percent to 111.4 pence. The Tanzania-focused gold producer posted a first-half net loss of $701.2 million after writing down the value of its mines by $727 million. It made a profit of $73.7 million in the year-earlier period.