Tuesday Morning View From Europe

by: Dealing Floor

From DealingFloor:

** EUROPE: IN PLAY TODAY **

- Earnings of note: Volvo, BP, Nestle, STMicroelectronics, Tesco, Hagemeyer, Michelin, Casino and UPM-Kymmene amongst a lot of others.

- French car maker Renault SA said Monday its first-quarter revenue rose by 7.1% from a year earlier to EUR10.54 billion, thanks to strong car sales outside Europe and mounting revenue from businesses other than making and selling new cars. The company said that after taking into account accounting and operational changes, revenue showed an increase of 5.8% from a restated EUR9.96 billion. The 2006 first-quarter figure came in well above financial analysts’ expectations for a figure closer to EUR9.46 billion, and was achieved despite a 2.6% fall in its vehicle sales.

- E.ON AG : The German utility’s 29 billion-euro cash offer to buy Spain’s Endesa SA (ELE SM) will be approved tomorrow by the European Union’s competition commissioner, Neelie Kroes, the newspaper Handelsblatt reported, citing unidentified people close to the authorities.

- Nestle SA, the world’s largest foodmaker, said first-quarter sales increased 14 percent as consumers in France and Spain bought more products such as Buitoni pastas and KitKat chocolate bars. Revenue rose to 22.8 billion Swiss francs ($18 billion) from 20 billion francs a year earlier. A Bloomberg survey of five analysts showed a median estimate of 22.6 billion francs.

- Volvo AB, Europe’s second-largest truckmaker, reported an unexpected gain in first-quarter profit as customers bought vehicles before more expensive models are required in October. Net income rose 23 percent to 3.98 billion kronor ($530 million), or 9.82 kronor a share, from 3.23 billion kronor, or 7.92 kronor, a year earlier. Earnings beat the 3.13 billion kronor median estimate of 10 analysts surveyed by Bloomberg News. Sales rose 15 percent to 60.2 billion kronor from 52.3 billion kronor.

- Tesco Plc, the U.K.’s largest supermarket company, said profit growth slowed in its latest fiscal year after competitor J Sainsbury Plc drew shoppers with lower prices. Tesco will raise 5 billion pounds ($8.9 billion) in the next five years by selling and leasing back land. Net income in the year ended Feb. 25 rose 17 percent to 1.58 billion pounds or 19.79 pence a share, from a restated 1.35 billion pounds, or 17.22 pence, a year earlier. Profit jumped 24 percent in Cheshunt, England-based Tesco’s previous year.

- TomTom reported a surge in 1Q net income to E31m (E29.8m expected) from E13.8m a year earlier. 1Q revenue rose 288% to E256m. The group raised its sales forecast.

- BP Plc, Europe’s biggest oil company, said profit dropped because of falling production after the Gulf of Mexico hurricanes and a shutdown of its largest refinery. Net income fell 15 percent to $5.62 billion in the three months ending March 31. That compares with $6.6 billion a year earlier.

- Hagemeyer NV
reported an 16% rise in first-quarter sales and repeated its financial targets for this year. The Naarden, Netherlands-based distributor of cables, fuses and first-aid kits said sales rose to EUR1.45 billion in the first quarter from EUR1.25 billion year earlier, beating analysts’ expectations for around EUR1.39 billion.

- German IFO today at 10:00 CET.

** US & ASIA: HEADLINES **

- U.S. Stocks Fall, Dragging Dow Industrials From Six-Year High, on Earnings
- Crude Oil Falls as Saudi Minister Says OPEC Keeping Market Well-Supplied
- Silver & Gold Falls as Lower Energy Costs Ease Demand for Hedge Against Inflation
- U.S. Treasuries Rise Amid Speculation High Energy Prices Will Slow Economy
- Bush Asks Justice Department to Look for Signs of Gas Price Manipulation
- Yuan Rises After Group of Seven Call Causes Region’s Currencies to Advance

** IRAN NEWS CONFERENCE WRAP-UP **

Iranian President Mahmoud Ahmadinejad spoke at a news conference in Tehran yesterday about the government’s economic and social policies, and the country’s uranium enrichment program. Ahmadinejad rejected a United Nations deadline to suspend Iran’s nuclear program, threatening to quit the Non-Proliferation Treaty if the UN doesn’t recognize Iran’s right to nuclear technology. But we guess the world was positively surprised by the president not saying this in an intimidating way and answering questions on the subject politely.

** US: AFTER HOURS **

- Sun Microsystems (+8.5% after hours) said third-quarter net loss widened to $217 million, or 6 cents a share, from $28 million, or 1 cent, a year earlier. Sales rose 21 percent to $3.18 billion. Analysts surveyed by Thomson Financial expected a loss of 6 cents on $3.21 billion in sales, based on the average of 20 estimates. Founder Scott McNealy steps down as CEO and will be succeeded by president Johnathan Schwartz.

** US: IN PLAY TODAY **

April Consumer Confidence and March Existing Home Sales, both of which will hit the wires at 16:00 CET. Among the S&P 500 constituents scheduled to post quarterly results before the
bell are AT&T (NYSE:T), DuPont (NYSE:DD), Lockheed Martin (NYSE:LMT), Lucent (LU) and Whirlpool
(NYSE:WHR). After the close, Amazon.com (NASDAQ:AMZN) amongst others.

** ASIAN MARKETS **

Nikkei 0,34%; Kospi -0,53%; HSI -0,72%; Taiwan -0,51%; China -0,29%; India -1,04%; Thailand -1,02%; Australia 0,36%

** ASIAN HEADLINES **

- Asian Exporter Stocks Drop for Second Day; Honda, Samsung Electronics Fall
- South Korean Economy Grew 1.3 Percent in First Quarter as Exports Climbed
- ICBC May Cap Amount of New Shares in $10 Billion Hong Kong IPO, People Say
- Woodside Petroleum Plans to Order as Many as 18 LNG Tankers, Voelte Says
- China Soybean Imports Rise 27 Percent After Concern Over Bird-Flu Drops
- Tokyo Electron, Advantest May Post Record Sales on Demand for Memory Chips
- Chinese Bank Shares May Fall on Concern Over Bad Loans, Competitors’ IPOs