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European Earnings: Beer, BT Shine

European earnings were mixed Thursday, with forecast-beating results out from London-based SABMiller and UK telecom BT and a drop in profit for financial KBC.

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The world's biggest brewer beat forecasts with a 19 percent rise in annual earnings but added beer volume growth in its current first-half will be hit by high input costs and high comparative figures.

The London-based maker of Miller Lite, Peroni and Pilsner Urquell beers posted adjusted earnings per share on Thursday of 143.1 U.S. cents for the year to March 31, against forecasts of 134.1 to 142.1 cents and a consensus of 137.8 cents.

It added the economic outlook across its global operations, biased towards growth markets in developing countries, remains positive, but added a note of caution.

The group, which bought Dutch brewer Grolsch in February and is waiting for approval to combine its U.S. operations with Molson Coors proposed a full-year dividend up 16 percent at 58 U.S. cents a share.

The group's annual EBITA (earnings before interest, tax and amortization) margin remained level with the prior year at 17.4 percent, even though costs rose sharply.

Underlying beer volumes in its financial year grew 7 percent but analysts say growth slowed to 1 percent in its fourth quarter to end-March.

BT Reports Strong Results

BT Group Chief Executive Ben Verwaayen signed off his last set of results with fourth-quarter figures which beat revenue forecasts and met earnings targets, and with a prediction of more growth next year.

Verwaayen will be replaced by BT retail boss Ian Livingston at the start of June.

BT did struggle with competition in the broadband market within its own retail and wholesale divisions, but analysts said Verwaayen's final results were mostly reassuring.

The group reported underlying earnings before interest, tax, depreciation and amortization (EBITDA) before specific items and staff leaving costs up 2 percent at 1.57 billion pounds ($3.05 billion) for the three months to March 31, in line with forecasts.

Britain's fixed-line telecoms provider said revenues rose 2 percent to 5.4 billion pounds, ahead of forecasts at 5.3 billion, with so-called new-wave revenues from broadband and corporate networked IT services representing 42 percent.

In broadband, BT's retail unit garnered a 30 percent share of net additional DSL connections, slipping from 35 percent in the previous quarter.

Revenues at the wholesale division were also hit by broadband competition.

KBC Net Profit Drops

Belgian banking and insurance group KBC reported a 27 percent drop in first-quarter underlying net profit due to weak capital markets and temporarily suspended its share buyback program.

Underlying net profit, which excludes one-off items, for the January-March period fell to 573 million euros ($886 million) from 781 million euros a year earlier, missing the average forecast of 641 million euros in a Reuters poll of nine analysts.

KBC, which competes in its home market with Fortis and Dexia, said in a statement it suspended its share buyback plan as of Thursday due to the uncertain market outlook and talk of increased capital requirements by both regulators and rating agencies.

Up to Tuesday, 2.2 billion euros of shares had been bought back, KBC said.

It had a 4 billion euro share buyback program running for 2006-2009.

KBC said it had a quarterly net profit impact of 93 million euros due to a markdown of its structured credit portfolio after a net impact of 132 million euros in 2007 due to writedowns.

RWE Operating Profit Falls

Germany's RWE, Europe's fourth-largest utility, reported first-quarter operating profit fell 10 percent, more than analysts had expected as earnings throughout Europe disappointed.

Operating profit in the three months through March fell to 2.5 billion euros ($3.87 billion) due to regulation in its home market, costs for emission certificates and lower income from trading in power and gas, RWE said.

Fourteen analysts polled by Reuters had on average expected operating profit to fall 5.7 percent to 2.6 billion euros.

The company repeated net income in 2008 will drop slightly compared with 2007 and that operating profit as well as earnings before interest, taxes, depreciation and amortization will at least reach last year's level.

A charge at its U.S. water unit American Water, in which RWE wants to sell a majority of shares to investors this year to focus on power and gas, led the company to reduce its expectations for 2008 net income in April.

Net income in the first quarter also dropped more than expected, sliding 49 percent to 809 million euros, while 13 analysts polled by Reuters had estimated net profit to fall to 868 million euros.

Arcandor Core Loss Narrows

Also in Germany, Arcandor's second-quarter core loss narrowedas the Anglo-German travel and retail group's Thomas Cook unit improved margins and a revamp of mail order unit Primondo bore fruit.

But Arcandor's Karstadt department stores -- for which the company is seeking a merger partner -- showed no major improvement and saw 0.7 percent growth in sales during the three months ended March.

Essen-based Arcandor, previously known as KarstadtQuelle, said its second-quarter adjusted loss before interest, tax, depreciation and amortization (EBITDA loss) was 53.3 million euros, compared with a loss of 178.9 million euros a year ago.

Sales rose 3.7 percent to 4.105 billion euros, it added on Thursday.

Arcandor reiterated that it expects adjusted EBITDA of more than 800 million euros in the fiscal year ending September 2008.

For fiscal 2008/2009 it expects sales of at least 23 billion euros and EBITDA of at least 1.3 billion euros.

In the first half of the current fiscal year, adjusted EBITDA was 114.3 million euros.

TUI's '08 Tourism, Shipping Earnings Rise

TUI said it expected considerable earnings growth in its tourism and container shipping businesses this year despite an economic slowdown.

It confirmed a 24 percent rise in first-quarter turnover to 5.1 billion euros ($7.91 billion and said booked tourism revenues for the winter season rose 5 percent year-on-year. Tourism made up roughly 70 percent of TUI's revenue in the first 3 months of 2008.