European Stocks Are Little Changed Amid Company Earnings

By Namitha Jagadeesh

European (SXXP) stocks were little changed, following the biggest two-day advance in almost nine months, as companies from Volvo AB (VOLVB) to Bayer AG reported earnings. U.S. index futures were also little changed, while Asian shares gained.

Bayer AG fell 1.4 percent after reporting worse-than- estimated earnings. Volvo advanced 2 percent as truck orders increased. British American Tobacco Plc rose 2.4 percent after first-quarter sales surpassed projections.

The Stoxx Europe 600 Index added 0.1 percent to 294.94 at 8:07 a.m. in London. The benchmark gauge gained 3.1 percent in the past two days as company earnings beat forecasts and investors speculated the European Central Bank will cut interest rates. It has rallied 5.5 percent so far this year. Contracts on the Standard & Poor’s 500 Index were also little changed, while the MSCI Asia Pacific Index jumped 0.8 percent.

“After the market gains of the last couple of days, we could well get a pause for reflection in Europe,” Michael Hewson, a market analyst at CMC Markets Plc in London, wrote in a note. “The disappointing economic data this past two weeks from Germany has raised market expectations of an ECB rate cut next week, but there remains considerable doubt as to whether it will be of any use without additional non-standard measures to supplement it.”

British Economy

In the U.K., the Office for National Statistics releases data at 9:30 a.m. that may show the country avoided an unprecedented triple-dip recession. Gross domestic product grew 0.1 percent in the first quarter after contracting 0.3 percent in the previous quarter, according to the median estimate of economists in a Bloomberg survey.

Bayer dropped 1.4 percent to 79.53 euros as Germany’s biggest drugmaker posted first-quarter earnings before interest, taxes, depreciation and amortization and one-time items of 2.45 billion euros ($3.2 billion), trailing the 2.55 billion-euro estimate of analysts in a Bloomberg survey. Bayer reiterated its 2013 forecast, after saying Feb. 28 it expects full-year sales of about 41 billion euros.

Unilever Sales

Unilever fell 2.2 percent to 2,783 pence in London after the world’s second-biggest consumer-goods company reported the slowest quarterly revenue growth in two years. So-called underlying sales, which exclude acquisitions, disposals and currency swings, rose 4.9 percent in the first quarter, from a year earlier. The median analyst estimate had projected a gain of 5.5 percent.

Electrolux AB slid 2.2 percent to 165.80 kronor as the world’s second-biggest maker of home appliances said net income fell to 361 million kronor in the three months ended March, missing the average analyst forecast calling for a profit of 517.5 million kronor.

Royal KPN NV slipped 2.1 percent to 2.72 euros after saying it will sell 2.84 billion new shares for 1.06 euros each, a 62 percent discount on yesterday’s closing price of 2.78 euros.

Volvo advanced 2 percent to 92.10 kronor after saying truck orders rose 11 percent to 61,045 in the first quarter. Swedish maker of vehicles reported first-quarter operating profit of 482 million kronor ($73 million), missing analysts’ average estimate of 1.63 billion kronor.

BAT climbed 2.4 percent to 3,632 pence as Europe’s largest cigarette maker said first-quarter sales excluding currency swings rose 5 percent, compared with the 3.7 percent estimate of analysts surveyed by Bloomberg.

To contact the reporter on this story: Namitha Jagadeesh in London atnjagadeesh@bloomberg.net

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