European Markets Advance 2%; Vestas Profit Surges, IAG Profit Tumbles

Sarla Buch
05 May, 2017
New York City

The struggling Italian lender Banca Monte dei Paschi net swung to a loss. easyJet said passenger traffic in April jumped 12%. IAG profit tumbled and launched

[R]4:00 PM Frankfurt – The struggling Italian lender Banca Monte dei Paschi net swung to a loss. easyJet said passenger traffic in April jumped 12%. IAG profit tumbled and launched £400 million investment program. Skanska net jumped 7% but revenues dropped. Vestas Wind profit surged on strong U.S. and China sales.[/R]

In London trading, FTSE 100 index advanced 24.73 or 0.3% to 7,273.74 and in Frankfurt the DAX index rose 16.43 to 12,664.63.

In Paris, CAC 40 index jumped 41.59 or 0.8% to 5,414.01.

For the week, FTSE 100 index jumped 2.2%, the DAX index soared 5.1% and the CAC 40 index advanced 2.1%.

Banca Monte dei Paschi di Siena SpA, the Italy-based banking services provider said net interest income in the first-quarter ending in March declined 16.6% form a year ago to €457.4 million.

Net in the quarter swung to a loss from a year ago to €169.2 million from €93.1 million and diluted loss per share swung to €5.77 from diluted earnings per share of €3.08.

The struggling lender said profit in the quarter was hurt by declining revenue and one-time costs and trading in stock is still halted as the bank is looking for a bailout from the Italian government for the last five months.

easyJet Plc soared 4.6% to 1,264.50 pence after the U.K.-based low-cost airline carrier reported passenger traffic in April jumped 11.7% to 7.12 million and load factor for the month increased 2.5 percentage points to 92.9% from 90.4% in the same month a year ago.

International Consolidated Airlines Group SA soared 6% to 606.50 pence after the U.K.-based airline services provider reported total revenues in the first-quarter ending in March fell 2.8% from a year ago to €4.9 billion.

Net profit in the quarter tumbled 74% from a year ago to €27 million from €104 million and diluted earnings per share declined €1 from €4.9.

Aer Lingus owner IAG said underlying operating profits in the quarter surged 10% to €170 million from a year ago period.

As of March 31, net debt plunged 13% to €7.1 billion from €8.2 billion and cash in the quarter surged 16.6% to €7.5 billion from €6.4 billion in a year ago period.

""This is a record performance in the first quarter, traditionally our weakest quarter, with the improving trend in passenger unit revenue continuing,"" said chief executive officer Willie Walsh.

Separately, the owner of British Airways and Iberia said traffic in April, measured in revenue passenger kilometers increased 10% from a year ago month and group capacity measured in available seat kilometers increased 4% and premium traffic jumped 7%.

The airliner today launched £400 million investment plan, including improvements in Club World, the introduction of Club Europe on UK domestic services, new lounges and First Wing direct security and lounge access at Heathrow.

Skanska AB slid 0.1% to 212.10 Swedish kronor after Sweden-based construction services provider reported total revenues in the first-quarter ending in March dropped 3% from a year ago to 34.2 billion kronor.

Net profit in the quarter jumped 6.7% from a year ago to 1.6 billion kronor from 1.5 billion kronor and diluted earnings per share increased to 3.90 kronor from 3.69 kronor.

Smith & Nephew Plc advanced 2.7% to 1,304 pence after the U.K.-based medical devices and services provider said revenues in the first-quarter ending in March were flat from a year ago to $1.1 billion.

The medical devices maker said revenues in the emerging markets returned to double digit growth of 13%, however, strong revenue growth continued in knee implants unit and jumped 4%.

In the full year, Smith & Nephew estimated underlying revenue growth between 3% and 4%.

Vestas Wind Systems A/S jumped 4.2% to 616 Danish kronor after Denmark-based wind power producer reported revenues in the first-quarter ending in March soared 26.7% from a year ago to €1.9 billion.

Net profit in the quarter surged from a year ago to €160 million from €35 million and diluted earnings per share advanced €0.75 from €0.16.

The wind power generator said operating profit in the quarter jumped €126 million to €211 million and profit margin increased to 11.2% from 5.8% in the first-quarter of fiscal 2016.

The value of backlog of wind turbine orders and service agreements stood at €20 billion, an increase of €2 billion from a year ago period, and service agreements with contractual future revenue of €11 billion at the end of March 2017.

Vestas reaffirmed fiscal 2017 revenue forecast in the range of €9.25 billion to €10.25 billion and profit margin before special items to jump between 12% and 14% while free cash flow of minimum €700 million.