Europe Factors to Watch-Shares set to dip; earnings in focus

PARIS Wed Feb 19, 2014 2:34am EST

PARIS Feb 19 (Reuters) - European stocks were set to dip in early trade on Wednesday as investors combed through a raft of company results, seeking clues on the outlook for corporate profits and on the potential damage caused by sharp currency swings in emerging markets.

The auto sector will be in focus after French carmaker PSA Peugeot Citroen unveiled a 3 billion euro ($4.1 billion) capital tie-up with China's Dongfeng and said the cash injection would buy time for a recovery after losing another 2.32 billion in 2013.

At 0725 GMT, futures for Euro STOXX 50, for UK's FTSE 100, for Germany's DAX and for France's CAC were flat to 0.2 percent lower.

Lafarge, one of world's biggest cement makers which derives 58 percent of its sales from emerging markets, said sales and profit took a hit from volatile currencies in the fourth quarter, although it stuck to its cost savings and debt reduction targets, betting on continued growth in emerging markets and a recovery in North America and Europe.

Brewer Carlsberg said operating profit rose 8 percent in the fourth quarter as improved margins in Western Europe and continued Asian growth offset sluggish sales in Eastern Europe.

In the banking sector, France's Credit Agricole said it will propose paying a dividend for the first time since 2010 as it swung to a profit and exceeded its own targets to strengthen its balance sheet.

European shares have been supported by relatively good corporate results in the current earnings season, with 58 percent of companies reporting in-line or better-than-expected profits, according to Thomson Reuters Starmine.

Europe bourses in 2014:

Asset performance in 2014:------------------------------------------------------------------------------ > GLOBAL MARKETS-Asia stocks in hesitant mood; euro holds gains > S&P 500 ticks up on M&A; Nasdaq extends winning streak > Nikkei slips on profit-taking, yen hurts exporters > FOREX-Euro hits 7-week high, dollar hampered by soft U.S. data > Gold eases from 3-1/2 month highs, but economy woes lend support > METALS-London copper slips, China tightening worries weigh > Brent holds above $110, WTI near 4-month top on winter boost

COMPANY NEWS:

PSA PEUGEOT CITROEN

PSA Peugeot Citroen announced a 3 billion euro ($4.1 billion) tie-up with China's Dongfeng Motor Group as the French carmaker posted a further loss for 2013.

CREDIT AGRICOLE

The French lender said it will propose paying a dividend against its 2013 results for the first time since 2010 as it swung to a profit and exceeded its own targets to strengthen its balance sheet.

CARLSBERG

Carlsberg's operating profit rose 8 percent in the fourth quarter as improved margins in Western Europe and continued Asian growth offset sluggish sales in Eastern Europe.

LAFARGE

Lafarge's sales and profit took a hit from volatile currencies in the fourth quarter but the French cement maker stuck to its cost savings and debt reduction targets on Wednesday, betting on continued growth in emerging markets and a recovery in North America and Europe.

VODAFONE

Vodafone said shareholders would receive 0.026 shares in Verizon Communications for each Vodafone share they own as part of their payout for the $130 billion sale of the group's stake in Verizon Wireless.

STANDARD CHARTERED

The lender is seeking buyers for a Hong Kong consumer finance business worth $500 million to $700 million, according to people familiar with the matter, as the Asia-focused lender sells off peripheral businesses.

CLARIANT

Clariant said its fourth-quarter net profit was virtually unchanged from a year earlier, as currency swings and higher spending hit.

ATOS

Atos forecast revenue growth, and improved operating margins and free cash flow this year, and said it aimed to list its Worldline unit on the stock market to accelerate its development and take part in the consolidation of the European payments industry.

KPN TELEFONICA

The European Union antitrust regulator objects to Telefonica's proposed 8.6 billion euro bid for KPN's German unit in its current form, two people familiar with the matter said.

RHEINMETALL

German defence group Rheinmetall reported a 21 percent drop in 2013 underlying operating profit due to restructuring costs that still beat even the most optimistic analyst estimate in a Reuters poll.

FINMECCANICA

The defence company is in talks with U.S. conglomerate GE for the sale of its engineering unit Ansaldo STS. Finmeccanica would like to sell to GE also certain activities of loss-making train-maker Ansaldo Breda. The remaining activities of Ansaldo Breda would be placed in a 'bad company', says Corriere della Sera.

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