Europe’s stock markets are all higher Wednesday, still enjoying a sense of relief after the E.U. yet again put off further sanctions on Russia at a meeting of foreign ministers Tuesday. Relief had earlier lifted Asian stockmarkets too, notably in Indonesia, where Joko Widodo was confirmed as the new president elections. The Jakarta composite index closed up 0.5%.
Earnings season is also in fill swing – the highlights are below.
Daimler AG (DDAIY) shares rose 1.1% after it said underlying operating profit rose 12% to €2.46 billion, thanks mainly to strong demand for its luxury S-class Mercedes sedans, which helped lift operating margins at the car division to an impressive 35%. Sales of Mercedes in Russia, a key export market, defied the collapse in economic confidence there since the start of the Ukraine crisis, rising 20% on the year. Profitability also rose at the group’s trucks and buses division.
French engineering company Alstom SA (AOMFF) said new orders doubled to €8.2 billion in the first three months of its fiscal year ending June 2015, although sales fell 1% to €4.3 billion, due to weak order flow in previous quarters. As with other French-based companies Publicis SA and Airbus NV (EADSF), Alstom also blamed the euro’s strength, saying foreign exchange had trimmed sales by 3%. The figures illustrated why the company has been keen to offload its power operations to General Electric Corp. and focus on rail transport: organic growth in transport sales hit 17%, while sales in the thermal and renewable power divisions were down 10% and grid sales fell 5%. The shares in Paris rose 0.8%.
Problems in power engineering were also in evidence at Swiss-Swedish company ABB Ltd. (ABB), where net profit fell 17% on the quarter to $636 million, missing consensus forecasts by 10%. The group’s power systems division swung to a basic operating loss of $24 million from a year-earlier profit of $159 million due to problems with solar and offshore wind power projects. The shares fell 1.7%
GlaxoSmithKline Plc (GSK) said core earnings per share fell nearly 10% from the first quarter, and said it now expects full-year EPS to be flat on the year, having previously forecast a rise of between 4% and 8%. The ongoing investigation into its sales practises in China, along with other supply chain-related problems, depressed sales in one of the group’s key markets. Overall sales were down 1%, with an 11% rise in revenue from Emerging Markets didn’t quite offset declines in the U.S. (10%) and Japan (7%). The shares fell 2.5%.
Russia’s biggest foot retailer OAO Magnit defied a sharp economic slowdown to post a 34% year-on-year increase in net profit to $356 million. The shares in London rose 4.5%. Magnit, which has been a stock-market darling since listing, said its basic operating margin rose to 11.7%, beating consensus forecasts of 10.7%. In the company’s press release, chief executive Sergei Galitsky restricted his comments on the quarter to a single word: “Enjoy.”