Sainsbury Down on Outlook, VW Cost Cuts Drives Earnings Higher

Sarla Buch
03 May, 2017
New York City

Fresenius lifted profit outlook. Hugo Boss said sales in the Americas dropped. Novo Nordisk profit jumped but narrowed fiscal forecast. Osram Licht net declined. Sainsbury net tumbled 20%. Volkswagen reaffirmed outlook.

[R]4:00 PM Frankfurt – Fresenius lifted profit outlook. Hugo Boss said sales in the Americas dropped. Novo Nordisk profit jumped but narrowed fiscal forecast. Osram Licht net declined. Sainsbury net tumbled 20%. Volkswagen reaffirmed outlook.[/R]

In London trading, FTSE 100 index decreased 23.42 or 0.3% to 7,222.03 and in Frankfurt the DAX index rose 14.63 to 12,523.66.

In Paris, CAC 40 index fell 9.18 or 0.2% to 5,295.17.

Fresenius SE & Co KGaA jumped 2.4% to €77.36 after Germany-based health care systems maker reported revenues in the first-quarter ending in March soared 19% from a year ago to €8.4 billion.

Net profit in the quarter surged 28% from a year ago to €457 million from €358 million and diluted earnings per share advanced €0.83 from €0.65.

Fresenius reaffirmed fiscal 2017 group sales estimate between 15% and 17%.

The group total assets increased 17% to €54.42 billion and group debt jumped 37% to €20.21 billion.

The healthcare products maker lifted fiscal 2017 net profit forecast, excluding acquisitions to increase between 19% and 21% from the earlier estimated range of 17% to 20%.

Hugo Boss AG declined 3.5% to €66.81 after Germany-based fashion clothing and accessories retailer reported revenues in the first-quarter ending in March rose 1% from a year ago to €651 million.

Comparable global sales in the quarter at its owned retail stores dropped 3% and said growth in Europe and Asia more than compensated for 4% decline in the Americas.

Net income in the quarter jumped 25% from a year ago to €48 million from €38.5 million and diluted earnings per share advanced €0.83 from €0.65.

The fashion clothier said gross profit in the quarter increased 2% to €419.2 million from €411.9 million in a year ago period.

The retailer estimated sales in the group’s own retail business to increase during the rest of the year.

Nexans SA plunged 5.7% to €48.68 after France-based copper and fiber optic cables provider said revenues in the first-quarter ending in March increased 1.2% from a year ago to €1.14 billion and jumped 5.5% compared with the fourth-quarter of 2016.

Nexans reported sales in submarine projects surged 31.7% but sales in industrial cables to the oil and gas segment declined 38.7% from a year ago period.

Novo Nordisk A/S soared 6.3% to 281.10 Danish kronor after Denmark-based diabetes and obesity care products maker reported sales in the first-quarter ending in March jumped 5% from a year ago to 28.5 billion kronor.

Net income in the quarter advanced 7% from a year ago to 10.2 billion kronor from 9.5 billion kronor and diluted earnings per share increased to 4.06 kronor from 3.71 kronor.

Operating profit increased by 10% reported in Danish kroner and by 6% in local currencies to DKK 13.5 billion.

In fiscal 2017, sales growth is now estimated to grow between 1% and 4% and operating profit growth in the range of zero to 4%.

Osram Licht AG gained 1.2% to €62.25 after Germany-based lighting fixtures maker reported revenues in the second-quarter ending in March jumped 9.7% from a year ago to €1.1 billion.

Net profit in the quarter declined 16.4% from a year ago to €79 million from €95 million and diluted earnings per share slumped to €0.81 from €0.90.

Osram said revenue growth was exceptionally strong in the LED business and surged 24% on a comparable basis. The company is expanding back-end capacity in Wuxi, China and the new LED chip factory in Kulim, Malaysia.

J Sainsbury Plc slumped 5.4% to 264.40 pence after the U.K.-based banking and supermarkets and convenience operator said group sales in the year ending in March soared 11.6% from a year ago to £26.2 billion.

Net profit in the year tumbled 19.9% from a year ago to £377 million from £471 million and diluted earnings per share dropped to 16.5 pence from 22.5 pence.

The retailer said total transactions in the year increased 3% to 26 million per week.

Sainsbury said net debt was reduced by £349 million to £1,477 million and the retailer is on track to deliver £500 million cost saving program by the end of fiscal 2017 and the company is targeting additional £500 million cost savings in the next three years.

Volkswagen AG slipped 1.3% to €145.70 after Germany-based automobiles maker reported group sales in the first-quarter ending in March soared 10.3% from a year ago to €56.2 billion.

Net profit in the quarter surged 43.9% from a year ago to €3.3 billion from €2.3 billion and diluted earnings per share jumped to €6.71 from €4.64.

Volkswagen reaffirmed fiscal 2017 sales revenue to increase 4% and operating profit between 6% and 7%.

""Our efforts to improve efficiency and productivity across all areas of the company are also paying off,"" said chief executive officer Matthias Mueller.