Deutsche Bank, Banco Santander Net Fall, Barclays Net Rises

Arthi Gupta
26 Apr, 2012
New York City

The European indexes struggled to advance after the euro area sentiment fell more than estimated in April. Italian borrowing costs rose in debt sale and the UK confidence improved in March. Fresenius planned to acquire Rh

[R]1:50 PM Frankfurt – The European indexes struggled to advance after the euro area sentiment fell more than estimated in April. Italian borrowing costs rose in debt sale and the UK confidence improved in March. Fresenius planned to acquire Rhön-Klinikum for €3.1 billion. Deutsche Bank quarterly net plunged 33%.[/R]

The European indexes pared gains after the euro area sentiment fell more than estimated in April and the latest batch of earnings showed mixed results from Royal Dutch Shell, Barclays, Deutsche Bank, Bayer and Volkswagen.

The UK confidence improved to a nine-month high but mortgage approvals fell in March and Italy sold 6-month bills at higher borrowing costs.

In Paris trading, the CAC-40 Index declined 26.96 or 0.8% to 3,206.50 and in Frankfurt the DAX Index edged lower 38.96 or 0.6% to 6,665.80.

The yield on Spain’s benchmark 10 year bonds was at 5.77% and the Italian bond yields fell 1.3 basis points to 5.64%.

The Italian Treasury sold €8.5 billion of six-month bills at an average yield of 1.772% compared to an average yield of 1.119% at the previous auction on March 28. The bid-to-cover ratio rose to 1.71 from 1.51 last month.

Fresenius Plans to Acquire Rhön-Klinikum

Fresenius SE & Co. KGaA, the German healthcare firm said it intends to takeover Rhön-Klinikum for approximately €3.1 billion to create Germany’s largest private hospital operator, with approximately €6 billion in sales and substantial cost and growth synergies.

The offer price of €22.50 per share in cash represents a premium of 52% on Rhön-Klinikum’s closing share price on April 25 and 53% on the share’s volume weighted average trading price over the last three months.

The transaction is expected to be accretive to group net income and slightly dilutive to earnings per share in the first year after closing, and to be slightly accretive to earnings per share in the second year.

Rhön-Klinikum AG is one of Germany’s largest private hospital operators, with reported sales of €2.6 billion and net income of €161 million in 2011.

Gainers & Losers

Alcatel-Lucent SA plunged 13.8% to €1.27 after the French telecom equipment company first quarter revenues fell 12.3% to €3.21 billion from €3.66 billion in the prior-year quarter. Net profit in the quarter swung to €398 million or 14 cents per share compared to a loss of €10 million or breakeven per share last year.

AstraZeneca PLC slumped 4.8% to 2,706 pence after the biopharmaceutical company reported first quarter revenue declined 11% to $7.35 billion from $8.29 billion last year. Pre-tax profit for the quarter fell 38% to $2.05 billion compared to $3.29 billion last year.

Banco Santander, S.A. fell 4.4% to €4.70 after the Spanish lender reported first quarter revenues grew 8% to €11.35 billion from €10.48 billion a year ago. Net earnings in the quarter fell 24% to €1.60 billion or 17 cents per share from €2.11 billion or 24 cents per share in the prior-year quarter.

Barclays PLC rose 0.9% to 212.80 pence after the financial services provider said first quarter adjusted pre-tax profit rose 22% to £2.45 billion from £2 billion in the year-earlier period.

Bayer AG climbed 2.1% to €54.34 after the German conglomerate reported first quarter advanced 6.8% to €10.06 billion from €9.42 billion last year. Net income in the quarter surged 53.5% to €1.05 billion or €1.27 per share from €684 million or 83 cents per share a year ago.

Deutsche Bank AG dropped 3.9% to €32.79 after the investment bank reported first quarter net revenues decreased 12% to €9.19 billion from €10.474 billion. Net income in the quarter plunged 33% to €1.381 billion or €1.44 per diluted share from €2.06 billion or €2.13 per share in the prior year.

Royal Dutch Shell plc increased 3% to 2,191.50 pence after the independent oil and gas explorer reported first quarter revenues climbed 9% to $119.92 billion from $109.92 billion generated last year. Net income in the quarter decreased 1% to $8.72 billion or $1.40 per diluted share from $8.78 billion or $1.42 per share a year ago.

Technip SA slid 3.6% to €86.03 after the French operator of gas and oil engineering, technologies and projects reported first quarter revenue climbed 22.9% to €1.77 billion from €1.44 billion a year ago. Net income in the quarter increased 7.6% to €112.2 million or 94 cents per share from €104.3 million or 92 cents per share last year.

Unilever plc soared 3.3% to 2,147 pence after the Anglo-Dutch consumer products maker reported first quarter turnover grew 11.9% to €12.14 billion from €10.86 billion last year.

Volkswagen AG surged 5.5% to €121.80 after the automobile manufacturer reported first quarter group sales revenue rose 26.3% to €47.33 billion from €37.47 billion in the earlier year quarter. Vehicle sales during the quarter climbed 11.11% to 2.26 million units from 2.03 million units last year.

Profit after tax for the quarter soared 86.1% to €3.19 billion from €1.71 billion a year ago.