Luxury Goods Stocks Plummet; Allianz, Inmarsat Net Fall

Nigel Thomas
06 Nov, 2015
New York City

European markets and luxury stocks trended lower after a warning from Richemont. Allianz profit declined 15% to

[R]4:00 PM Frankfurt – European markets and luxury stocks trended lower after a warning from Richemont. Allianz profit declined 15% to €1.4 billion. ArcelorMittal net swung to a loss to $711 million after shipment and revenues declined. Inmarsat profit tumbled 21%. Rhoen-Klinikum net slumped. Zurich Insurance net plunged.[/R]

Market indexes across Europe traded lower and luxury stocks led the decliners after Richemont issued earnings warning.

The seasonally adjusted UK trade deficit in goods and services in September narrowed to £1.4 billion from £1.6 billion in August. Export prices in September rose 1.7% and import prices grew 0.9%.

Separately, the Office of National Statistics reported that production output in September rose 0.8% from August and jumped 1.1% from a year ago.

The UK economy approaches full employment and the labour market will tighten in the near future, according to Minouche Shafik, Bank of England Deputy Governor.

In London trading, FTSE 100 index slipped 12.68 or 0.2% to 6,352.22 and in Frankfurt the DAX index fell 15.00 or 0.14% to 10,872.74.

In Paris, CAC 40 index fell 42.09 or 0.85% to 4,937.95.

Allianz SE dropped 2.3% to €155.40 after the Germany-based financial services provider reported total revenues of €27.5 billion for the third-quarter ending in September, down 4.3% from a year ago to.

Net profit in the quarter declined 15.4% from a year ago to €1.36 billion compared to €1.61 billion and diluted earnings per share decreased to €2.98 from €3.52.

According to CFO Dieter Wemmer, the operating profit for the year is expected to grow at upper end of targeted range of €10 to €10.8 billion”.

ArcelorMittal SA increased 2.1% to €5.08 although the Luxembourg-based steel maker said sales in the third-quarter ending in September plunged 22.3% from a year ago to $15.6 billion.

Net in the quarter swung to a loss from a year ago to $711 million compared to profit of $22 million and diluted loss per share swung to a 40 cents from diluted profit of 1 cent.

ArcelorMittal said sales in Europe declined 20.8% to $7.67 billion on lower steel shipments in the region and total steel shipments dropped 2.1% to 21.1 million metric tons.

The company also suspended its dividend payment and cut its guidance for the full year earnings before interest, taxes, depreciation and amortization of Ebtida to between $5.2 billion to $5.4 billion from a previous range of $6 billion to $7 billion.

The steel producer cut its guidance for the full year EBITDA and suspended dividend payment.

BHP Billiton Plc declined 4.4% to 988.30 pence after the U.K.-based mining company said that a serious incident of mudslide has occurred at the dam of Samarco Mineração S.A’s iron ore operation in Minas Gerais, Brazil and has immersed several houses and likely killed the people.

Diageo Plc fell 0.4% to 1,888.50 after the alcoholic beverages maker agreed to divest its wine interests in Argentina-based unit to Grupo Peñaflor for an undisclosed amount.

Diageo said that it expects to book exceptional pretax loss of about £60 million after the deal.

The transaction is expected to close in early 2016.

Inmarsat Plc gained 2.4% to 997 pence after the U.K.-based mobile satellite communications services provider reported total revenues in the third-quarter ending in September soared 7.5% from a year ago to $323.1 million.

Net profit in the quarter tumbled 21.2% from a year ago to $62 million compared to $78.7 million but diluted earnings per share increased 14 cents from 10 cents.

For the year, the company estimated total group revenue to be in the range $1.25 billion to $1.3 billion and by the end of the year.

The company plans to launch a new commercial service for high-speed broadband on boats and capital expenditure expected between $450 million and $500 million.

Rhoen-Klinikum AG edged up 0.1% to €27.31 after the Germany-based health care services provider reported revenues in the nine-months period ending in September plummeted 32.9% from a year ago to €831.9 million.

Net profit in the quarter slumped from a year ago to €64.4 million compared to €1.23 billion and diluted earnings per share dropped to €0.88 from €8.86.

For the year, the company forecasted revenues in the range of € 1.08 billion to €1.12 billion and operating profit between € 145 million and € 155 million.

Compagnie Financiere Richemont SA plummeted 9.1% to 78.75 Swiss francs after the owner of Cartier, Vacheron Constantin, and Montblanc warned of worsening outlook for the second half of the year.

Sales for the first-half ending in September soared 15% from a year ago to €5.82 billion.

Net profit in the quarter surged 22% from a year ago to €1.10 billion compared to €907 million and diluted earnings per share jumped to €1.95 from €1.60.

The company said strong sales through Maisons’ own boutiques offset mixed wholesale sales, which were particularly weak in the Asia Pacific region.

Zurich Insurance Group Ltd dropped 1.3% after the Switzerland-based insurance company reported revenues in the third-quarter ending in September declined 47.5% from a year ago to $9.46 billion.

Net income in the quarter plunged 78.6% to $207 million, mainly due to losses in its U.S. transportation business as well as expenses linked to the explosions in Tianjin port in China.