Europe Factors to Watch-Stocks set to rise; earnings in focus

Tue Apr 29, 2014 2:37am EDT

PARIS, April 29 (Reuters) - European stocks were set to rise on Tuesday,
adding to the previous session's gains, as investors were combing through the
quarterly results of a number of blue-chips including drug maker Sanofi
, chip maker Infineon and lender Deutsche Bank.
    Shares in the German bank will be in focus after it posted a 30 percent drop
in pretax profit in the first quarter, hit by a slump in bond trading revenue.
The bank's earnings tumble signals a weak start to 2014 in what is traditionally
a strong quarter, however the drop was not as big as analysts had expected.
    Overall, the pretax contribution from the investment banking division fell
by more than a fifth, which could fuel worries over the results of other
European investment banks. Revenue declines in trading, especially in bonds,
have dogged investment banking results at peers such Barclays, JPMorgan
 and Citigroup. 
    At 0626 GMT, futures for the Euro STOXX 50, UK's FTSE 100,
Germany's DAX and France's CAC were up 0.3 to 0.7 percent.
    Boosting investor sentiment on Tuesday, data showed German consumer morale
remained at its highest level in more than seven years heading into May.
 
    Investors were digesting quarterly results from a flurry of blue-chip
companies including Swiss engineering group ABB, which posted an
unexpected fall in first-quarter profit, and French luxury goods maker Hermes
, which reported a forecast-beating 14.7 percent rise in like-for-like
first-quarter sales.
    On the tech sector, German chipmaker Infineon said on Tuesday it
now expect sales and margins to reach at least the upper end of its target range
for this year on robust demand from its customers in automotive and industrial
markets. 
    "We haven't had any nasty surprises in earnings so far, which is good news
for the market, although we're still far from a genuine rebound in profits that
everyone is hoping for this year," a Paris-based trader said.
    "The market should stay range-bound until we have a real positive catalyst
to resume the rally."
    Europe's earnings season has been mixed so far. About 22 percent of
companies listed on the STOXX Europe 600 index have reported quarterly
results, of which 55 percent have beaten or met analysts' expectations, with
profits down 3.3 percent on average.
    In comparison, some 75 percent of U.S. companies have beaten or met
forecasts this earnings season.
    Europe bourses in 2014: (link.reuters.com/pad95v)
    Asset performance in 2014: (link.reuters.com/rav46v)
------------------------------------------------------------------------------
  MARKET SNAPSHOT AT 0629 GMT:
                                         LAST  PCT CHG  NET CHG
 S&P 500                             1,869.43   0.32 %     6.03
 MSCI ASIA EX-JP                       474.56    -0.30    -1.43
 EUR/USD                               1.3867   0.13 %   0.0018
 USD/JPY                               102.53   0.05 %   0.0500
 10-YR US TSY YLD                       2.706       --     0.03
 10-YR BUND YLD                         1.512       --     0.01
 SPOT GOLD                          $1,293.90  -0.13 %   -$1.70
 US CRUDE                             $100.99   0.15 %     0.15
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  > Brent holds above $108; Libya, U.S. inventories eyed 
    
    COMPANY NEWS:
    
    DEUTSCHE BANK 
    Deutsche Bank's pretax profit fell by 30 percent in the first quarter to
1.68 billion euros ($2.33 billion), the bank said on Tuesday, depressed by an
industry-wide slump in bond trading revenue. 
    
    SANOFI 
    The French drugmaker reported lower-than-expected first-quarter earnings on
Tuesday, weighed down by a delay in supply of paediatric vaccines in emerging
markets and generic competition in animal health. 
    
    SANTANDER 
    The euro zone's biggest bank, on Tuesday said it had launched an offer to
buy out 25 percent of its Brazilian unit it does not already own. The lender
also said net profit rose 8 percent in the first quarter of 2014 to 1.3 billion
euros, slightly below a 1.36-billion-euro forecast in a Reuters poll. 
    
    INFINEON 
    The German chipmaker said on Tuesday it now expect sales and margins to
reach at least the upper end of its target range for this year on robust demand
from its customers in automotive and industrial markets. 
    
    HERMES 
    The French luxury goods maker on Tuesday posted a forecast-beating 14.7
percent rise in like-for-like first-quarter sales, driven by strong demand for
its fashion and leather goods. 
    
    ENI 
    The Italian oil and gas group said on Tuesday its net profit in the first
quarter fell 14.3 percent on the year due to a weaker oil price and stronger
dollar. 
    
    NORDEA 
    The Nordic region's biggest bank reported first-quarter earnings in line
with expectations and said it expected to finalise plans for its accelerated
cost savings programme during the second quarter. 
    
    TOMTOM 
    The Dutch navigation equipment maker on Tuesday increased its outlook for
2014, boosted by stronger-than-expected results in the first quarter and a
one-off tax settlement. 
    
    STATOIL 
    The Norwegian oil and gas group reported an adjusted first-quarter operating
profit above expectations and offered a dividend payment for the quarter of 1.80
crowns per share. 
    
    ORANGE 
    France's biggest telecom operator continued cutting costs on everything from
staff to mobile phone marketing, allowing it to hold profit margins steady
despite lower sales across its major markets. 
    
    CAPGEMINI 
    French technology consultancy stuck to its full-year organic sales growth
and operating margin targets on Tuesday as it posted a 2.3 percent rise in
first-quarter sales at constant exchange rates.

 (Reporting by Blaise Robinson; Editing by Atul Prakash)
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