Friday Morning View From Europe

by: Dealing Floor

From DealingFloor:

** EUROPE: HEADLINES **

- Ericsson Posts Surprise Decline in Profit Because of Purchase of Marconi
- German Unions, Employers Meet for Pay Negotiations as Strike Threats Mount
- Europe, Japan Rebounds Aid Global Economy as Group of Seven Ministers Meet
- Tom Hunter and Baugur Offer to Purchase Wyevale for About $560.1 Million
- Deutsche Bank Wins Regulator Approval to Buy Stake in China’s Huaxia Bank
- Oil Trades Near $73 Because of Concern Gasoline Supplies May Be Disrupted

** EUROPE: IN PLAY TODAY **

- Ericsson reported flat net income compared to a year earlier at SEK4.6bln(SEK5.26bln expected) due partly to the 1.2bln purchase of Marconi. Revenue rose
24% SEK39.2bln from SEK31.5bln same time last year. The company announced
that 1Q gross margin excluding Marconi was inline with last Q.- Alcatel plans to
boost sales in Southeastern Europe to E400m in 2006 as economies in the region
grow.

- Thomson’s CEO plans to take the company off the stock market through a
leveraged buyout (Dow Jones). Blackstone Group, Providence Equity Partners and
Apax Partners Worldwide have been approached about the possible buyout (WSJ).

- Volkswagen’s supervisory board has set a target of at least 8% return on
equity, and 6% on sales (Wirtschaftswoche).

- Swiss Re plans to raise $3.9bln in shares and convertible bonds to finance its
purchase of General Electric’s reinsurance business, less than the $4.7bln
initially planned.

** US: TRADING HEADLINES **

- GM Results Beat Forecasts on 14 Percent Increase in Revenue; Shares Climb 10%
- Bank of America, Regional Banks Report Higher Earnings on Consumer Loans
- Dow Average Reaches Highest Since 2000 on General Motors, Merck Results
- Crude Oil Falls on Signs U,S, Gasoline Supplies May Be Adequate for Demand
- Silver, Gold Prices Tumble in New York After Rally to Highest Since 1980s

** US: AFTER HOURS **

- Excluding non-recurring items and stock based comp expense, Google
( +8% after hours ) reported Q1 earnings of $2.29 per share, $0.31 better than the
Reuters Estimates consensus. Total revenues including Traffic Acquisition Costs
rose 79.1% year/year to $2.25 bln vs. the $2.15 bln consensus. Revenues
excluding Traffic Acquisition Costs came in at $1.527 bln vs. $1.44 bln First
Call consensus.

- Sandisk (-2.7% after hours) reported Q1 earnings of $0.44 per share, excluding
non-recurring items, a penny worse than the Reuters Estimates consensus of
$0.45. Total revenues rose 38.2% year/year to $623.3 mln (consensus $623.9 mln);
co reported gross margin 38% vs. 39.3 street expectation.

** US: IN PLAY TODAY **

Dow components 3M Co (NYSE:MMM) and McDonalds (NYSE:MCD), Ford Motor (NYSE:F), Ericsson (ERICY), and Schlumberger (NYSE:SLB) will report quarterly earnings today.

** ASIAN HEADLINES **

- China’s Yuan Falls After Hu Offers No Measures to Allow Stronger Currency
- Bush, Meeting Hu Jintao, Acknowledges China’s Rising Power on World Stage
- Asian Stocks Rise on Earnings Expectations; AU Optronics and Honda Advance
- Chartered Semiconductor Posts First-Quarter Profit on More Demand For Xbox
- Reliance Petroleum Share Sale Oversubscribed, Gets Bids Worth $30 Billion
- Hong Kong Stock Market Overtakes Canada to Become World’s Sixth Biggest
- Palladium Makers to Target Shanghai, Beijing, Promoting Metal for Jewelry

- Oil Trades Near $73 Because of Concern Gasoline Supplies May Be Disrupted
- Copper in Shanghai Falls for Second Day as Record Gains Seen as Excessive
- Gold Little Changed in Asia Trading After Falling The Most in Eight Years