European Indexes Lower, RWE Annual Net Falls

Arthi Gupta
06 Mar, 2012
New York City

European indexes declined after the euro zone economy contracted 0.3% in the fourth quarter. Daimler and Volkswagen reported record auto sales in February. Merck quarterly profit tripled.

[R]1:00 PM Frankfurt – European indexes declined after the euro zone economy contracted 0.3% in the fourth quarter. Daimler and Volkswagen reported record auto sales in February. Merck quarterly profit tripled.[/R]

European indexes traded lower after Eurostat confirmed that the euro-zone economy contracted 0.3% in the fourth quarter.

Weakening global economic data has also added to investors’ woes. Yesterday, China lowered its growth target to an eight-year low for 2012.

Investors are awaiting the outcome of Greek private investors’ willingness to participate in the bond swap deal with a deadline on March 8.

In Paris trading, the CAC-40 Index declined 52.58 or 1.5% to 3,434.96 and in Frankfurt the DAX Index edged lower 99.95 or 1.5% to 6,766.74.

Italian 10-year yields climbed five basis points to 4.98%. Spanish 10-year yields were at 5%.

Euro-zone GDP Shrinks 0.3%

The euro-zone economy contracted 0.3% in the fourth quarter compared to the 0.1% growth in the third quarter, unrevised from an earlier estimate, Eurostat confirmed today.

From a year ago, the gross domestic product grew 0.7% in the fourth quarter following a 1.3% expansion in the third quarter.

Gainers & Losers

Air Berlin Plc fell 1.3% to €2.32 after the German airline reported that the number of passengers for February declined 4.1% to 2.04 million from 2.13 million the prior year.

Daimler AG declined 2.5% to €44.83 after the German auto maker reported global Mercedes-Benz car sales for February rose 20.3% to 104,073 units from last year, driven by strong growth in China, Germany and the U.S.

Glencore International plc slid 1.1% to 398.75 pence as commodities price ease on weaker global economic growth expectations.

Koninklijke Philips Electronics N.V. plunged 4% to €14.95 after the Dutch multinational electronics company placed a total of $1.5 billion of new senior debt.

Merck KGaA dipped 0.9% to €79.96 after the pharmaceutical and chemical company reported fourth quarter total revenues increased 3.1% to €2.63 billion from €2.55 billion in the comparable period a year ago. Net profit in the quarter soared 191.8% to €135.6 million or 62 cents per share compared to €46.5 million or 21 cents per share in the prior-year quarter.

Total revenues in fiscal 2011 increased 10.6% to €10.28 billion from €9.29 billion in 2010. Net profit after non-controlling interests for the year fell 2.3% to €617.1 million from €632.1 million in 2010.

PSA Peugeot Citroën S.A. slumped 4.7% to €13.54 after the car maker announced the launch of a capital increase for approximately €1 billion to fund investments related to projects that are core to the global alliance with General Motors.

RWE AG rose 2% to €35.19 after the German utility reported fiscal year 2011 revenues dropped 3.1% to €51.69 billion from €53.32 billion last year. Annual net income attributable to shareholders slumped 45.4% to €1.81 billion or €3.35 per share from €3.31 million or €6.20 per share last year.

Recurrent net income declined 34% to €2.48 billion from €3.75 billion a year earlier.

Volkswagen AG declined 2.2% to €139.85 after the Germany-based automobile manufacturer announced it plans to invest €62.4 billion worldwide plus an additional €14 billion in China during the period to 2016.

The company aims to reduce CO2 emissions from its European new vehicle fleet by about 30% from 2006 to 2015.

Separately, the Volkswagen branded passenger cars deliveries increased 17.7% in February to 399,700.