LVMH Net Drops 23%; Commerzbank Up 6%

Mayank Mehta
27 Jul, 2009
New York City

European markets edged higher on earnings outlook. LVMH leaked earnings showed a decline of 23%. Societe Television Francaise surged after net dropped 61%. Thomson SA and banks agreed on revised lending terms. Porsche plunged 11%.

[R]7:00 PM Frankfurt, Paris; 1:00 PM New York – European markets edged higher on earnings outlook. LVMH leaked earnings showed a decline of 23%. Societe Television Francaise surged after net dropped 61%. Thomson SA and banks agreed on revised lending terms. Porsche plunged 11%.[/R]

European stocks increased on increased consumer confidence in Germany, falling jobless rate in France, ahead of Deutsche Bank earnings tomorrow and rising new home sales in the U.S.

In Paris CAC 40 Index increased 5.91 or 0.18% to close at 3,372.36 and in Frankfurt DAX index higher 22.19 or 0.42% to close at 5,251.22.

Gainers & Losers

LVMH declined 2% to 61.30 euros after its earnings were leaked to the financial markets by a data vendor FactSet Research Systems Inc. Calls to the company’s office in Europe were not returned.

Pernod Ricard SA decreased 2.3% to 51.15 euros after weak results from LVMH.

Societe Television Francaise surged 14% to 9.85 euros after it reported first half revenues declined 14% to 1.1 billion euros and net income fell 61% to 49 million euros.

Thomson SA surged 38% to 98.70 euro cents after the company renegotiated its debt structure with its lender that avoided bankruptcy for now. The company has net debt of 2.3 billion euros at the end of June quarter. Revenues in the first half declined 1.9% to 1.8 billion euros and consolidated net loss of 325 million euros on 306 million euros of impairment charges.

Commerzbank surged 5.8% to 5.35 euros after it agreed to sell its Swiss banking unit to LGT Group. Deutsche Bank increased 2.2% to 52.03 euros ahead of earnings tomorrow.

Solarworld AG increased 4.8% to 18.25 euros after it reported second quarter net surged 26% to 27.9 million euros from the first quarter and reiterated its sales target for the year of 1 billion euros. Revenues in the quarter increased 27% in volume of MW but declined 5.6% to 402 million euros.

Porsche dropped 11% to 45.60 euros after the company confirmed the debt level of 10 billion euros in response to the media reports suggesting that debt of 14 billion euros. The Focus magazine reported the news.

Earnings Review

Julius Baer Holding Ltd said first-half net interest income rose 27% to CHF280.8 million from CHF221.1 million a year ago. Net profit in the first-half rose 36.6% to CHF323.5 million compared to net profit of CHF510.1 million a year ago.

LVMH Moet Hennessy Louis Vuitton SA first half net profit declined 23% to 687 million euros from 891 million euros a year ago period. The retail unit sales increased 6.4% and sales of watches and jewelry unit declined 6.8%.

Ryanair Holdings plc, the largest low-cost airline said first quarter revenues rose 0.3% to €776.9 million from €774.7 million a year ago. Net profit in the quarter was €123 million or Rs.8.31 per diluted share compared to net loss of €90.5 million or Rs.6.11 per share a year ago.

Thales SA, the largest defence electronics company said first-half revenue rose 2% to €5.74 billion from €5.67 billion a year ago. Net profit in the first-half fell 96% to €12 million compared to net profit of €289 million a year ago.

Thales SA, in the last one year traded as high as €39.55 in September 2008 and as low as €27.22 in March 2009. Based on the Friday’s closing price of €29.40 the company has market cap of €5.73 billion.

Europe Markets Review

In London FTSE 100 Index closed higher 9.52 or 0.21% to 4,586.13, in Paris CAC 40 Index increased 5.91 or 0.18% to close at 3,372.36 and in Frankfurt DAX index higher 22.19 or 0.42% to close at 5,251.22. In Zurich trading SMI increased 13.99 or 0.24% to close at 5,774.89.

DAX Index Movers

Volkswagen AG led the decliners in the DAX index of 4.21% followed by losses in Daimler AG of 3.34%, in BASF SE of 1.74%, in BMW AG of 1.32%, in Deutsche Lufthansa AG of 1.25%.

CommerrzBank AG led gainers in the DAX index with a rise of 6.76% followed by increase in Salzgitter AG of 2.38% in ThyssenKrupp AG of 2.14%, in E.ON AG of 1.93%, in Deutsche Bank AG of 1.74%.

CAC-40 Index Movers

PSA Peugeot Citroen S.A. led the decliners in the CAC-40 index of 3.54% followed by losses in Cap Gemini SA of 2.57%, in Pernod Ricard SA of 2.27%, in EADS NV of 2.08%, in LVMH SA of 1.98%.

Lagardere SCA gainers in the CAC-40 index with a rise of 2.19% followed by gains in Bouygues SA of 2.17%, in AXA of 1.91%, in Schneider Electric SA of 1.79%, in Suez Environnement SA of 1.69%.