European companies struck an upbeat tone on one of the busiest earnings days of the quarter, saying growth will continue in the second half as economies expand.
STMicroelectronics NV said revenue will rise in the third quarter for semiconductors used in cars and industrial machines, Daimler AG predicted a strong end to the year as it introduces new models of Mercedes cars and Publicis Groupe SA, the owner of advertising agencies including Leo Burnett and Saatchi & Saatchi, confirmed an earlier forecast of accelerated growth in the second half.
The comments came as a relief after angst about Greece potentially leaving the euro region and a plunging Chinese stock market darkened sentiment over the past month. European companies are benefiting from cost reductions, the euro’s weakness and growing economies.
“Results season is up and running and the early indications are positive,” Robert Parkes, an equity strategist at HSBC Holdings Plc, wrote in a report. “We believe there is plenty more to come.”
About 1,800 European companies are scheduled to announce results over the next month. The positive outlook may already be built into stock prices broadly. The Stoxx Europe 600 Index, which has risen 17 percent this year, fell 0.1 percent Thursday.
Still, share prices gained for most big companies reporting earnings. Geneva-based STMicro jumped 8.1 percent to 7.37 euros, the steepest intraday gain since April 2013. While personal-computer sales are slowing, the company is benefiting from rising orders for more lucrative chips sold to makers of vehicles, wearable electronics and industrial machinery.
Publicis, Unilever
Paris-based Publicis rose 0.8 percent to 72.70 euros as the company benefits from growth in digital advertising.
Unilever, the maker of Magnum ice cream and Hellmann’s mayonnaise, expects underlying sales to accelerate further in the second half of the year. The stock climbed 1.5 percent to 41.36 euros in Amsterdam.
Daimler’s Mercedes nameplate is adding four new or revamped sport utility vehicles this year, including the compact GLC entering showrooms in September.
ABB Ltd., the world’s largest maker of power grids, sees positive signs about economic growth. The company on Thursday reported higher-than-expected profit for the second quarter even as it battled slowing demand in China and the U.S.
“The growth projections in Germany, Italy and France have been corrected on the upside a little bit, so that gives some hope,” ABB Chief Executive Officer Ulrich Spiesshofer said on a call with reporters.
source: Bloomberg
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