November 12, 2013 / 6:31 AM / in 4 years

Europe Factors to Watch-Shares seen steady, earnings in focus

PARIS, Nov 12 (Reuters) - European stocks were seen steady on Tuesday, with
investors combing through a batch of company results from blue-chips including
Vodafone, Infineon and Deutsche Post.
    At 0720 GMT, futures for Euro STOXX 50, for UK's FTSE 100,
for Germany's DAX and for France's CAC were flat to up 0.1
    A sharp rally in Japanese stocks on Tuesday was seen lending support to
European equities, as Tokyo's Nikkei surged 2.2 percent to a near
three-week high, propelled by exporters benefiting from a softer yen.
    Telecom companies will be in the spotlight as Vodafone posted a
record fall in quarterly organic service revenue and also after credit rating
agency Moody's said Europe's telecom operators will see a fifth year of revenue
decline in 2014, although operating margins will stabilise. 
    Italian banks will also be in focus, after UniCredit, the
country's biggest lender, said net profits fell 40 percent and revenues fell 8.5
percent in what CEO Federico Ghizzoni said in a statement was a "particularly
challenging third quarter." 
    "Not much inspiration from earnings, and on the macro front, there are no
positive catalysts in sight, so we could see people booking profits before the
end of the year," a Paris-based trader said.
    Europe's earnings season has been disappointing so far. About 80 percent of
STOXX Europe 600 companies have reported results, and half of them have
missed profit forecasts while nearly two thirds have missed revenue forecasts,
according to data from Thomson Reuters StarMine.
    This is a sharp contrast with results posted in the second quarter, during
which only 42 percent of companies missed profit forecasts.
    The euro zone's blue-chip Euro STOXX 50 index has surged 22
percent since late June, a rally fuelled in part by massive liquidity provided
by central banks while euro zone macroeconomic data has improved. 
                                         LAST  PCT CHG  NET CHG
 S&P 500                             1,771.89   0.07 %     1.28
 NIKKEI                             14,588.68   2.23 %   318.84
 MSCI ASIA EX-JP                       542.81   0.07 %     0.37
 EUR/USD                               1.3387  -0.14 %  -0.0019
 USD/JPY                                99.67   0.52 %   0.5200
 10-YR US TSY YLD                       2.777       --     0.03
 10-YR BUND YLD                         1.772       --     0.02
 SPOT GOLD                          $1,279.69  -0.24 %   -$3.13
 US CRUDE                              $94.90  -0.25 %    -0.24
  > GLOBAL MARKETS-Asian shares head for 4th day of falls 
  > US STOCKS-Dow ends at record high in light trade; focus on Fed 
  > Tokyo's Nikkei share average closes up 2.23 pct 
  > FOREX-Dollar rises back towards 100-yen level on Fed taper view 
  > PRECIOUS-Gold stays below $1,300 as markets worry about U.S. stimulus 
  > METALS-London copper sags ahead of key China policy meeting 
  > Brent edges down towards $106; Iran deal in focus 
    Vodafone plans to spend 7 billion pounds on its networks following the sale
of its U.S. business, ramping up investment after it posted a record fall in
quarterly organic service revenue. 
    The German chip maker reported a year-on-year 26 percent rise in its core
operating profit, driven by its industrial and security units. 
    The world's No. 1 postal and logistics group posted a better-than-expected
rise in quarterly operating profit as earnings at its domestic mail and
international courier units helped to offset adverse currency moves. 
    Net profit at Italy's No.1 bank by assets fell 40 percent in the third
quarter to 204 million euros, buoyed by the sale of insurance operations in
Turkey. Revenues fell 8.5 percent and fees also dropped in what CEO Federico
Ghizzoni said in a statement was a "particularly challenging third quarter, not
only due to seasonality". 
Italy's biggest retail bank Intesa Sanpaolo said on Monday it was selling its
1.3 percent stake in top domestic insurer Generali to institutional investors
via a book-building process.
Troubled Italian lender Carige said it had booked goodwill writedowns worth 1.65
billion euros after regulator Consob queried the value of some investments,
including a stake in the Bank of Italy, in its 2012 and 2013 accounts.
    Air France-KLM will not participate in a capital increase at battered
airline Alitalia on Friday, Le Figaro newspaper reported, echoing a similar
report in La Tribune two weeks ago. Italian airline Alitalia has called a board
meeting for Wednesday to discuss a revised industrial plan for the loss-making
carrier that could include heavy job losses, sources familiar with the situation
said on Monday.
    The German maker of washing powder, shampoos and adhesives raised its profit
margin outlook for the year after a robust adhesives division helped to offset
currency headwinds in the third quarter. 
    The world's largest maker of synthetic rubber for tyres on Tuesday posted a
26 percent drop in adjusted core earnings, hurt by lower product prices and weak
overseas currencies. 
    Spanish infrastructure and renewable energy firm Acciona posted a 7 percent
fall in nine-month core profit from a year ago, hit by government energy reforms
and a prolonged downturn in the domestic construction sector. 
    Spain's Caixabank said on Monday it would issue 620 million euros ($831
million) worth of 3-year bonds exchangeable for shares in Spanish oil major
    Danish jewellery maker Pandora PNDORA.CO confirmed preliminary third-quarter
results published in late October, when it raised its full-year results
forecasts after sales growth in all its major regions. 
    Swiss Life Chief Executive Officer Bruno Pfister will hand over his duties
to current investment chief Patrick Frost on July 1 next year, the insurer said.
    The Italian phone company said on Monday it confirmed a mandate to
management to finalise a sale of its stake in Telecom Argentina.
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