European Market Soft; L'Oreal, Alcatel Lucent Net Rise

Nigel Thomas
11 Feb, 2011
New York City

Stocks in Europe declined after tensions in Egypt rose and largest crowd gather in Tahrir Square in Cairo. German inflation rose in January and Greece joined Italy and said it is opposed to numerical target to lower budget deficit. L

[R]3:50 PM Frankfurt – Stocks in Europe declined after tensions in Egypt rose and largest crowd gather in Tahrir Square in Cairo. German inflation rose in January and Greece joined Italy and said it is opposed to numerical target to lower budget deficit.[/R]

Stocks in Europe declined as crude oil prices gained and inflation in Germany accelerated in January. L’Oreal SA quarterly net was softer than expected and Alcatel SA reported a rise in earnings.

FTSE 100 index declined 5.37 to 6,014.64, DAX index fell 7.01 to 7,333.27 and CAC 40 index dropped 17.72 to 0.4% to 4,077.42.

Indexes in Athens and Madrid dropped 0.6% and in Milan declined 0.4%.

Crude oil price rose and China increased bank reserve requirement for small banks as lending increase in January.

German Inflation Rises to 2%

Inflation in Germany rose to 2% annual rate in January from 1.9% in December according to the latest data released by the Federal Statistics Office in Wiesbaden.

Prices declined 0.5% in the month and rose 1.2% in December on a harmonized basis and the increase in food prices are still not visible in the core prices.

Food prices have been on the rise worldwide and a rise in fuel prices of more than 11% in the last three months have also not affected the core inflation rate so far.

Nokia and Microsoft in Smartphone System Deal

Nokia Corp declined as much as 10% in European trading after the company released a strategic partnership with Microsoft.

Nokia will use the mobile operating system developed by Microsoft for its smartphones as it struggles to gain traction in the market dominated by Google’s operating system Android and Apple Inc made iPhone.

The decision to use Microsoft’s Windows Phone has not been easy for the company after struggling with Symbian operating system and its internal group developing higher end system for smartphones.

Of the 100 million smartphones shipped it he fourth quarter Windows Phone has were only 2 million.

Earnings Movers

Alcatel Lucent ((ALU)), the France based transformation solution provider reported fourth quarter revenue increased 22.6% to 4.86 billion euros from 3.97 billion a prior year. Net income in the quarter surged to 340 million euros or 17 cents per diluted share compared to 46 million euros or 3 cents per share a year ago.

Revenue for the full year 2010 increased 5% to 16.00 billion euros from 15.16 billion euros a year ago. For the full year, the company's net loss declined to 334 million euros or $0.20 per diluted share from 524 billion euros or $0.33 per share in the prior year.

Credit Suisse Group AG, the Switzerland based financial services company reported fourth quarter revenue increased 7% to CHF 6,960 million from CHF 6,533 million a prior year. Net income in the quarter increased 6% to CHF 841 million or CHF 0.59 per diluted share compared to CHF 793 million or CHF 0.56 per share a year ago.

Revenue for the full year 2010 fell 9% to CHF 30,625 million from CHF 33,617 million a year ago. For the full year, the company's net income decreased 24% CHF 5,098 million or CHF 3.89 per diluted share from CHF 6,724 million or CHF 5.14 per share in the prior year.

L'Oreal SA, the France-based cosmetics company reported for the year net sales increased to 19.50 billion euros from 17.47 billion euros a prior year. Net profit for the year increased to 2.242 billion euros or 3.79 euros per diluted share compared to 1.795 billion or 3.07 euros per share a year ago.

TOTAL S.A. ((TOT)), the international oil and gas company reported fourth quarter sales soared 11% to 40.16 billion euros from 36.23 billion euros a prior year. Net income in the quarter declined 2% to 2.03 billion euros or 1.14 euros per diluted share compared to 2.06 million or 0.93 euros per share a year ago.

Revenue for the full year 2010 increased 21% to 159.27 billion euros from 131.33 billion euros a year ago. For the full year, the company's net income increased 25% to 10.57 billion euros or 4.58 euros per diluted share from 8.45 billion euros or 3.48 euros per share in the prior year.