European Earnings: Bayer Beats
Earnings from a smorgasbord of European companies revealed a mixed business environment Thursday, with the likes of Bayer and Swedbank beating expectations, while Peugeot Citroen and Stora Enso missed.
Bayer posted a 9 percent increase in quarterly operating profit thanks to its contraceptives and multiple sclerosis drugs as well as farming products used to fight weeds and fungi.
It maintained its 2008 group outlook but raised its forecasts for its CropSciences business thanks to booming agricultural markets.
First-quarter earnings before interest, taxes and special items rose to 1.5 billion euros ($2.4 billion), compared with an average estimate of 1.36 billion euros in a Reuters poll of 14 analysts.
Germany's BASF, the world's biggest chemicals company by sales, remains upbeat despite signs of a slowing global economy after posting strong first-quarter results that beat expectations.
"Our long-term strategy is paying off," Chief Executive Juergen Hambrecht said. "That's most apparent in turbulent times like the ones we're currently seeing in the financial markets."
BASF's first-quarter earnings before interest and tax before special items rose 11.2 percent to 2.35 billion euros ($3.8 billion), beating the average forecast of 2.2 billion euros in a Reuters poll of 14 analysts.
Europe's second-biggest auto group, PSA Peugeot Citroen, maintained a target for 2008 sales volume to rise 5 percent after its first- quarter volume increased by 6.1 percent.
It said it had 2.3 percent higher first-quarter revenues of 15.21 billion euros ($24.25 billion), slightly below an average forecast of 11 analysts of 15.32 billion euros.
Gaz de France
Gaz de France reported 15 percent growth in first-quarter sales to 10.376 billion euros and confirmed its financial objectives for 2008.
The figure was boosted by colder weather compared to the start of last year and by a rise in regulated tariffs.
Energy purchase and sales, which make up about three quarters of the former gas monopoly's revenues, boosted revenues by 15 percent to 7.972 billion euros.
Gaz de France also confirmed its financial objective for 2008, namely an EBITDA of 6.1 billion euros.
Nobel Biocare, the world's largest maker of dental implants, posted a surprise 25 percent drop in first-quarter net profit and cut its 2008 outlook as customers rein in spending due to economic concerns.
First-quarter net profit at the group slumped to 32.9 million euros ($52.46 million), falling short of an average estimate of 44 million euros in a Reuters poll of 13 analysts.
French retailer PPR posted in line first-quarter sales but Gucci's growth slowed down more than expected, providing the first signs the consumer spending slowdown is starting to hit luxury goods.
Luxury peer rivals LVMH and Richemont had posted solid first-quarter sales figures earlier this month, indicating that the luxury sector had not yet been affected by worsening global economic conditions.
Stora Enso, the world's top paper and board maker, reported a sharper fall than expected fall in January-March profits on Thursday, hit by wood costs and the strong euro.
Stora operating profit excluding one-offs fell to 140.1 million euros ($223 million) in the first quarter from 294.9 million in the same period a year earlier, missing the average forecast of 153 million in a Reuters poll.
Swedish banking group Swedbank posted first-quarter operating profit just above market expectations on Thursday despite recent financial market turmoil which cut into some income lines.
Operating profit fell to 3.72 billion Swedish crowns ($637 million) from 3.81 billion in the same period in 2007, beating an average forecast of 3.63 billion in a Reuters poll.
Nordic banks have avoided the kind of billion-dollar writedowns that hit
Merrill Lynch in the first quarter and have forced the likes of Citigroup to shore up their balance sheets.
Fiat reported a 193 million euro trading profit at its main car business for the first quarter, beating analysts' expectations.
For the entire industrial group, which includes Iveco trucks and CNH tractors and combines, the figure gained 28.7 percent to 766 million euros, also above expectations.
Fiat confirmed its group targets for the year, including a higher trading profit of up to 3.6 billion euros. -- Reuters contributed to this report