Europe Movers: Nestle, Nokia, Nordea Bank, Pernod Ricard

Inga Muller
17 Oct, 2024
Frankfurt

European markets advanced after the European Central Bank lowered its key lending rates by 25 basis points, as widely anticipated. 

Inflation in the currency union fell below the target rate of 2% for the first time in over three years.

The DAX index increased by 0.9% to 19,598.83; the CAC-40 index rose by 1.2% to 7,584.37; and the FTSE 100 index rose by 0.4% to 8,362.67. 

The yield on 10-year German bonds edged lower to 2.19%, French bonds inched lower to 2.94%, the UK gilts edged down to 4.07%, and Italian bonds decreased to 3.40%.

Nordea Bank increased 5.5% to €10.97 after the Helsinki-based bank raised its estimate of annual return on equity and announced a new stock buyback plan. 

Pernod Ricard increased 1.9% to €125.80 despite the French wine and spirit maker reporting a decline in sales. 

Sales in the fiscal first quarter declined 8.5% to €2.78 billion, and the negative impact of unfavorable foreign exchange rates was €103 million. 

The company blamed the weakness on a sharp decrease in sales in China because of weak consumer sentiment, inventory adjustments in the U.S., and technical challenges in India. 

Sales in the U.S. declined by 10%, in China plunged by 26%, in Europe fell by 3%, but rose in India by 2%. 

Nokia Oyj declined 4.3% to €3.88 after the Finnish tech company reported a 9% increase in operating profit and reiterated its annual earnings outlook. 

Net sales in the third quarter declined 7% to €4.3 billion from €4.7 billion, net income increased 32% to €175 million from €133 million, and diluted earnings per share rose to 3 cents from 2 cents a year ago.

The company reiterated its full-year operating earnings outlook to range between €2.3 billion and €2.9 billion and free cash flow conversion from operating profit to range between 30% and 60%. 

Nestle SA increased 2.5% to CHF 86.02 despite the Swiss food product maker reporting weaker-than-expected sales. 

Reported sales in the nine-month period declined 2.4% to CHF 67.1 billion from CHF 68.8 billion, driven by the 4.1% negative impact of foreign exchange rates and net divestures by 0.3%. 

The company estimated full-year organic sales growth of 2%, underlying operating profit margin of around 17%, and underlying earnings per share growth in constant currency to be broadly flat.