European Markets Weak, Novartis Net Drops 6%

Nigel Thomas
23 Apr, 2015
New York City

European markets traded lower after economic activities were deemed to be slowing in a private survey. Ericsson profit declined 14%. Novartis profit plunged 6% to $2.3 billion on 7% decrease in revenues. WPP revenues in the first-quarter climbed 8%.

[R]4:00 PM Frankfurt – European markets traded lower after economic activities were deemed to be slowing in a private survey. Ericsson profit declined 14%. Novartis profit plunged 6% to $2.3 billion on 7% decrease in revenues. WPP revenues in the first-quarter climbed 8%.[/R]

European markets traded lower after a private survey showed slowing growth in manufacturing sector and ongoing concerns over the future of Greece in the euro zone.

The composite purchasing managers index tracking activities in manufacturing and services sector in the euro zone declined to 53.5 in April from 54.0 in March, according to index provider Markit.

Any reading below 50 indicates declining activities and rising activities above 50.

In London trading, FTSE 100 index rose 0.3% or 18.84 to 7,047.08 and in Frankfurt the DAX index declined 1.2% or 146.95 to 11,720.42.

In Paris, CAC 40 index dropped 0.8% or 39.89 to 5,171.20.

In addition, German 10-year bond yield rose to 0.16% after falling to a low of 0.05% after the European Central Bank started its bond buying program and set off a surge in demand for the popular bond.

The yield on 10-year Greek bonds rose to 12.4% and the yield on 2-year bond traded at 26.3%.

Earnings News

Ericsson plunged 10.1% to 99.45 kronor after the Sweden-based communication services provider reported sales in the first-quarter ending in March climbed 10% to 53.52 billion kronor from 47.51 billion kronor in a year ago period.

Net income in the quarter declined 14% from a year ago to 1.32 billion kronor compared to 2.12 billion kronor and diluted earnings per share declined to 0.40 kronor from 0.65 kronor.

The company said sales from enterprise network business jumped 8.4% to 26.44 billion kronor and global services revenues soared 17.4% to 23.90 billion kronor. North America region sales were nearly flat at 12.25 billion kronor.

Novartis AG gained 0.3% to 100.50 Swiss francs after the Switzerland-based drug-maker reported net sales in the first-quarter ending in March declined 7% to $11.94 billion from $12.77 billion in a year ago period.

Net income in the quarter plunged 6% from a year ago to $2.31 billion compared $2.45 billion and diluted earnings per share slipped to 96 cents from 99 cents.

WPP Plc, the U.K.-based advertising and media investment company said revenues in the first-quarter ending in March climbed 8.3% to £2.78 billion from £2.57 billion in a year ago period.

Net sales in North America grew 10.7% to £915 million and net sales in the U.K. region soared 10.5% to £350 million.

As of March, the company said net debt was £3.18 billion compared to £2.96 billion in 2014, an increase of £218 million.

William Hill Plc declined 4.1% to 357.20 pence after the U.K.-based betting and gaming products maker said group net revenue in the first-quarter ending in March increased 1% but revenues from mobile gaming soared 48%.

Net revenue from online casino games climbed 10% and revenues form Bingo segment jumped 8% while revenues from Poker segment plunged 32%.

The company said operating profits in the quarter declined 19% to £16 million.