European Markets Fall on Weakness in Novartis and SAP

Nigel Thomas
21 Jul, 2015
New York City

European markets traded lower after Novartis missed earnings outlook. Novartis profit plunged 32% on 5% decrease in revenues. Akzo net surged 61%. Remy Cointreau sales jumped 4%. SAP profit declined 16% to

[R]4:00 PM Frankfurt – European markets traded lower after Novartis missed earnings outlook. Novartis profit plunged 32% on 5% decrease in revenues. Akzo net surged 61%. Remy Cointreau sales jumped 4%. SAP profit declined 16% to €469 million but revenues climbed 20%. Sartorius net soared 63%.[/R]

Market indexes in Europe traded lower on a weakness pharmaceutical companies after Novartis reported lower than expected earnings.

Traders worried that the strengthening dollar and the expected increase in U.S. interest rate is likely to keep the Novartis earnings in check in the next few quarter.

In London trading, FTSE 100 index slid 6.84 to 6,781.81 and in Frankfurt the DAX index slipped 0.9% or 103.16 to 11,631.87.

In Paris, CAC 40 index decreased 0.5% or 24.59 to 5,118.57.

In addition, investors looked at Greece as Prime Minister Alexis Tsipras has until Wednesday mid-night in winning a parliamentary approval of conditions demanded by lenders.

Akzo Nobel N.V gained 1.4% to €70.40 after the Netherlands-based paints and coatings maker said revenues in the second-quarter ending in June jumped 6% to €3.95 billion form €3.71 billion in a year ago period.

Net profit in the quarter surged 61% from a year ago to €331 million compared to €205 million and earnings per share jumped to €1.99 from €1.37.

Novartis AG slipped 1.9% to 100.40 Swiss francs after the Switzerland-based healthcare products maker reported net sales in the second-quarter ending in June dropped 5% to $12.69 billion from $13.35 billion in a year ago period.

Net income in the quarter plunged 32% to $1.84 billion compared to $2.59 billion and diluted earnings per share slumped to 75 cents from $1.03.

The company said the divestment of Novartis influenza business to CSL is expected to be finished in the second-half of this year.

Remy Cointreau decreased 2.3% to €67.44 after the France-based wines and spirits maker said net sales in the first-quarter ending in June increased 3.9% to €223.3 million form a year ago period on weak demand in China but sales improved in Western Europe and in the U.S.

SAP SE fell 0.7% to €68.28 after the Germany-based enterprise application developer reported total revenues in the second-quarter ending in June climbed 20% to €4.97 billion from €4.15 billion in a year ago period.

Net profit in the quarter declined 16% from a year ago to €469 million compared to €556 million and earnings per share jumped to €0.39 from €0.47.

SAP said revenues in cloud and software jumped 21% to €4.06 billion and revenues in software licenses segment climbed 13% to €3.51 billion.

The company added revenues in cloud subscriptions and support business surged 129% to €552 million as the new cloud booking in the quarter soared 162% to €203 million.

Sartorius AG jumped 4.4% to €187.20 after the Germany-based medical testing services provider said sales revenues in the first-half ending in June climbed 26.6% to €535.3 million form €423 million in a year ago period.

Net profit in the period soared 63.1% from a year ago to €91.8 million compared to €31.7 million and diluted earnings per share increased to €4.51 to €1.35.