European stocks may gain amid signs that profits are rebounding after Porsche AG, J Sainsbury Plc and Deutsche Lufthansa AG met or exceeded forecasts.
Results from Nokia Oyj, the world's largest mobile-phone maker; Royal Philips Electronics NV, Europe's biggest maker of consumer electronics; and SAP AG, the No. 1 business-management software company, may signal whether earnings will recover at electronics and computer-related companies. All have lost more than half their value this year.
Europe's Dow Jones Stoxx 600 Index rose 3 percent this week, rebounding from a 5 1/2-year low on Wednesday, after a string of better-than-expected earnings statements. The index is still 32 percent lower for the year. Some investors are optimistic that profits will be higher than stock prices suggest.
"The market was panicking too much," said Pieter Spierings, who helps manage 6.4 billion euros (US$6.3 billion) at Kempen & Co.
in Amsterdam. "The business outlook is tough, but not every company is going bankrupt."
He recently bought shares in Siemens AG and BNP Paribas SA.
Porsche rose 9 percent yesterday after the German sports-car maker said second-half profit climbed a greater-than-expected 95 percent because of demand for its 911 model. The company, which said it is "positive" about the earning outlook for next year, ended the week 4 percent higher.
Sainsbury, Britain's second-largest grocery chain, also jumped 9 percent Friday. The London-based company said it expects to meet analysts' profit forecasts and dispelled concern it plans to cut its dividend. The stock, which touched its lowest since March 2000 on Wednesday, closed the week 2.9 percent higher.
Lufthansa, Europe's No. 3 airline, posted its biggest gain in more than 10 years Friday, advancing 12 percent, after saying its 2002 operating profit forecast was "very conservative." The stock gained 9 percent for the week.
Metro AG surged 17.5 percent yesterday. Germany's biggest retailer said business in the third quarter was "very satisfactory" both in Germany and abroad.
"If the market has come down so much and you get some earnings that are better than expected, then the market will cling to that," said Stephen Doherty, who manages US$500 million at Aberdeen Asset Management. He recently bought shares in Metro, which is still 51 percent lower for the year.
Nokia is expected on Thursday to say third-quarter profit tripled to 565 million euros because of smaller losses from vendor financing and a pick-up in cell-phone demand, according to a Bloomberg News survey of nine analysts. Nokia rose 8 percent this week. The company is 49 percent lower for the year.
Philips is expected to report on Tuesday a third-quarter profit of 12.5 million euros, compared with a loss of 736 million euros in the year-earlier period, according to the average estimate of nine analysts surveyed by Bloomberg News. Its shares rose 5.8 percent for the week.
SAP, the world's largest maker of business management software, surged 31 percent this week. It is expected to say on Thursday that third-quarter net income more than tripled to 124 million euros from a year earlier, according to the average forecast of eight analysts polled by Bloomberg News.
Other European companies are also scheduled to report earnings this week.
Nissan Motor Co has agreed to sell its global headquarters in Yokohama for ￥97 billion (US$630 million) to a group sponsored by Taiwanese autoparts maker Minth Group (敏實集團), as the struggling automaker seeks to shore up its financial position. The acquisition is led by a special purchase company managed by KJR Management Ltd, a Japanese real-estate unit of private equity giant KKR & Co, people familiar with the matter said. KJR said it would act as asset manager together with Mizuho Real Estate Management Co. Nissan is undergoing a broad cost-cutting campaign by eliminating jobs and shuttering plants as it grapples
TEMPORARY TRUCE: China has made concessions to ease rare earth trade controls, among others, while Washington holds fire on a 100% tariff on all Chinese goods China is effectively suspending implementation of additional export controls on rare earth metals and terminating investigations targeting US companies in the semiconductor supply chain, the White House announced. The White House on Saturday issued a fact sheet outlining some details of the trade pact agreed to earlier in the week by US President Donald Trump and Chinese President Xi Jinping (習近平) that aimed to ease tensions between the world’s two largest economies. Under the deal, China is to issue general licenses valid for exports of rare earths, gallium, germanium, antimony and graphite “for the benefit of US end users and their suppliers
PERSISTENT RUMORS: Nvidia’s CEO said the firm is not in talks to sell AI chips to China, but he would welcome a change in US policy barring the activity Nvidia Corp CEO Jensen Huang (黃仁勳) said his company is not in discussions to sell its Blackwell artificial intelligence (AI) chips to Chinese firms, waving off speculation it is trying to engineer a return to the world’s largest semiconductor market. Huang, who arrived in Taiwan yesterday ahead of meetings with longtime partner Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), took the opportunity to clarify recent comments about the US-China AI race. The Nvidia head caused a stir in an interview this week with the Financial Times, in which he was quoted as saying “China will win” the AI race. Huang yesterday said
Dutch chipmaker Nexperia BV’s China unit yesterday said that it had established sufficient inventories of finished goods and works-in-progress, and that its supply chain remained secure and stable after its parent halted wafer supplies. The Dutch company suspended supplies of wafers to its Chinese assembly plant a week ago, calling it “a direct consequence of the local management’s recent failure to comply with the agreed contractual payment terms,” Reuters reported on Friday last week. Its China unit called Nexperia’s suspension “unilateral” and “extremely irresponsible,” adding that the Dutch parent’s claim about contractual payment was “misleading and highly deceptive,” according to a statement
RSS