Profit at Europe's largest companies may shrink in the third quarter and the pace of earnings growth might slow by more than half next year as oil prices surge, export demand fades, and consumers from Madrid to Berlin cut spending.
Earnings among Dow Jones Stoxx 600 Index companies will probably drop by an average of 6 percent this quarter from the second, according to JCF Group, which provides consensus surveys of analysts. JCF estimates Stoxx 600 profit growth will slow to 10.3 percent on average next year, from 2004's 24.1 percent.
A European unemployment rate of 9 percent, oil at a record high and a drop in demand from abroad threaten profitability after a quarter when companies including Siemens AG and Royal Philips Electronics NV beat estimates and Allianz AG said its Dresdner Bank AG unit had a second straight profit.
"The spectacular growth we've seen can't be sustained," said Cees Prins, who oversees the equivalent of US$56 billion as chief strategist at Delta Lloyd NV in Amsterdam. "We are facing a period when growth will be much lower than it has been." Twenty-six of the 40 Dow Jones Stoxx 50 companies that have reported second-quarter earnings so far have beaten estimates. At the same time, the Stoxx 50 Index, up 0.9 percent in the second quarter, fell 5.2 percent in the third.
Allianz AG, Europe's biggest financial-services company, said today second-quarter earnings fell 7.2 percent as the company didn't repeat a year-earlier tax gain. The Dresdner Bank unit earned 129 million euros in the second quarter.
Nestle SA, the world's biggest foodmaker, may report a 6.1 percent gain in first-half earnings, according to the median estimate of eight analysts polled by Bloomberg.
Sampo Oyj, Finland's biggest financial-services company, said today profit in the second quarter more than tripled. Erste Bank der Oesterreichischen Sparkassen AG, Austria's second- biggest bank by assets, will probably tomorrow report a 40 percent increase in second-quarter profit.
"Everyone anticipates a slowdown in these earnings," said Stefan Duchateau, who oversees the equivalent of US$107 billion at KBC Asset Management in Brussels. "You could have a fundamental blow coming from the oil price." Crude oil for September delivery rose as much as US$0.32, or 0.7 percent, to a record US$46.90 a barrel in after-hours electronic trading on the New York Mercantile Exchange, the highest intraday price since 1983.
The government is aiming to recruit 1,096 foreign English teachers and teaching assistants this year, the Ministry of Education said yesterday. The foreign teachers would work closely with elementary and junior-high instructors to create and teach courses, ministry official Tsai Yi-ching (蔡宜靜) said. Together, they would create an immersive language environment, helping to motivate students while enhancing the skills of local teachers, she said. The ministry has since 2021 been recruiting foreign teachers through the Taiwan Foreign English Teacher Program, which offers placement, salary, housing and other benefits to eligible foreign teachers. Two centers serving northern and southern Taiwan assist in recruiting and training
WIDE NET: Health officials said they are considering all possibilities, such as bongkrekic acid, while the city mayor said they have not ruled out the possibility of a malicious act of poisoning Two people who dined at a restaurant in Taipei’s Far Eastern Department Store Xinyi A13 last week have died, while four are in intensive care, the Taipei Department of Health said yesterday. All of the outlets of Malaysian vegetarian restaurant franchise Polam Kopitiam have been ordered to close pending an investigation after 11 people became ill due to suspected food poisoning, city officials told a news conference in Taipei. The first fatality, a 39-year-old man who ate at the restaurant on Friday last week, died of kidney failure two days later at the city’s Mackay Memorial Hospital. A 66-year-old man who dined
EYE ON STRAIT: The US spending bill ‘doubles security cooperation funding for Taiwan,’ while also seeking to counter the influence of China US President Joe Biden on Saturday signed into law a US$1.2 trillion spending package that includes US$300 million in foreign military financing to Taiwan, as well as funding for Taipei-Washington cooperative projects. The US Congress early on Saturday overwhelmingly passed the Further Consolidated Appropriations Act 2024 to avoid a partial shutdown and fund the government through September for a fiscal year that began six months ago. Under the package, the Defense Appropriations Act would provide a US$27 billion increase from the previous fiscal year to fund “critical national defense efforts, including countering the PRC [People’s Republic of China],” according to a summary
‘CARRIER KILLERS’: The Tuo Chiang-class corvettes’ stealth capability means they have a radar cross-section as small as the size of a fishing boat, an analyst said President Tsai Ing-wen (蔡英文) yesterday presided over a ceremony at Yilan County’s Suao Harbor (蘇澳港), where the navy took delivery of two indigenous Tuo Chiang-class corvettes. The corvettes, An Chiang (安江) and Wan Chiang (萬江), along with the introduction of the coast guard’s third and fourth 4,000-tonne cutters earlier this month, are a testament to Taiwan’s shipbuilding capability and signify the nation’s resolve to defend democracy and freedom, Tsai said. The vessels are also the last two of six Tuo Chiang-class corvettes ordered from Lungteh Shipbuilding Co (龍德造船) by the navy, Tsai said. The first Tuo Chiang-class vessel delivered was Ta Chiang (塔江)