European Energy Stocks, BP Advance as Oil Rises; Banks Declineadmin
European energy stocks, the worst- performing shares in the past three months, gained after crude prices rebounded. BP Plc and Royal Dutch Shell Plc, the region’s largest oil companies, paced the advance.
“We are still positive on oil stocks despite the recent correction in the oil price,” said Sergi Martin, who helps oversees $5.3 billion at Credit Andorra in Andorra. “They are still cheap however you look at them, and we don’t think crude oil prices will fall much further.”
Svenska Handelsbanken AB, the fourth-biggest Nordic bank, led financial stocks lower after reporting profit that was less than analysts estimated. Alcatel SA climbed after better-than- expected earnings for Lucent Technologies Inc., which the French company is buying. Reckitt Benckiser Plc rose as the household- cleaners maker increased a profit forecast.
The Dow Jones Stoxx 600 Index was little changed, adding less than 0.1 percent to 354.90. The Stoxx 50 decreased 0.1 percent, as did the Euro Stoxx 50, an index for the 12 euro countries.
The Stoxx 600 yesterday extended a four-month rally as falling oil prices eased concern that central banks may raise interest rates to fight inflation. Crude gained today on speculation cold weather in the U.S. could boost demand for heating oil.
Benchmarks gained in nine of western Europe’s 18 markets. The U.K.’s FTSE 100 advanced 0.3 percent. Germany’s DAX Index added 0.1 percent, while France’s CAC 40 Index fell 0.1 percent.
Crude oil for December delivery rose as much as 52 cents, or 0.9 percent, to $59.33 a barrel on the New York Mercantile Exchange. Futures have plunged 23 percent from a record $78.40 a barrel reached July 14.
Shares of BP, Europe’s largest oil company, added 1.1 percent to 608 pence. Shell rose 0.6 percent to 1,774 pence.
BP gained even as it said today profit fell 3.6 percent in the third quarter and cut its full-year production target because of pipeline leaks in Alaska.
“We expected the numbers to be down year on year, and they’ve had the pressure of lower production in Alaska,” said Andrew Bell, head of equity research at Rensburg Sheppards Plc in London.
The Stoxx 600 Oil & Gas Index has risen 1 percent in the past three months, the smallest advance among the 18 industry groups in the broader benchmark, which has climbed 11 percent in the period. The oil and gas measure trades at 10 times estimated earnings, compared with 13.9 for the Stoxx 600.
Neste Oil Oyj, Finland’s only oil refiner, added 4.5 percent to 24.35 euros. The company said third-quarter operating profit rose 67 percent because of higher refining margins. Earnings per share increased to 72 cents from 41 cents, the company said. Analysts surveyed by SME Direkt and Kauppalehti forecast profit of 48 cents a share.
Svenska Handelsbanken lost 4.5 percent to 192 kronor. The Stockholm-based bank said net income in the third quarter fell 27 percent to 2.12 billion kronor ($290 million), less than the 2.6 billion kronor analysts in a survey by SME 3.98 billion kronor analysts had estimated.
SEB AB, the third-biggest Nordic lender, dropped 1 percent to 206 kronor. Nordea Bank AB, the region’s largest bank, slid 0.6 percent to 99.9 kronor. Credit Agricole SA, France’s second- biggest bank, lost 1 percent to 33.4 euros.
Alcatel, a French network-equipment maker, jumped 7.2 percent to 10.29 euros. Lucent said fourth-quarter net income was little changed at $371 million. Analysts including Alexander Henderson at Citigroup Inc. had expected Lucent earnings to drop. Alcatel’s third-quarter profit fell 42 percent as a gain wasn’t repeated.
Reckitt Benckiser rose 5.6 percent to 2,324 pence. The world’s largest maker of household cleaners raised its full-year sales and profit forecasts as the health-care unit the company bought from Boots Group Plc contributed more savings than expected.
Lonza Group AG jumped 6.3 percent to 95.95 francs. The third- biggest drug-ingredient maker agreed to buy biopharmaceutical divisions from Cambrex Corp. for $460 million to expand in a market that’s been outperforming the Swiss company’s own targets.
STMicroelectronics NV, Europe’s biggest chipmaker, fell 2.7 percent to 13.3 euros. Infineon Technologies AG, the region’s second-largest, declined 0.4 percent to 9.71 euros.
Texas Instruments Inc., the world’s largest producer of mobile-phone processors, said it expects sales this quarter of $3.46 billion to $3.75 billion, short of the $3.81 billion forecast by analysts in a Thomson Financial survey.
STMicroelectronics is due to report its latest earnings today after U.S. markets close.
Software AG, Whitbread
Software AG increased 3.7 percent to 51.03 euros. Germany’s second-largest software maker said third-quarter profit rose 12.5 percent to 17.1 million euros ($21.4 million) after the company increased sales of its licenses. License sales, which indicate future revenue from consulting and maintenance, increased to 37 million euros from 29.2 million euros.
The Darmstadt, Germany-based company had been expected to report third-quarter net income of 16.4 million euros on 34.4 million euros in license sales, according to the median estimates of four analysts surveyed by Bloomberg.
Whitbread Plc gained 4 percent to 1,405 pence. The U.K. restaurant, lodging and health-club company said first-half profit climbed 35 percent, boosted by the sale of restaurants and increased revenue at its Costa cafes and Premier Travel Inn hotels. Whitbread said it will return 350 million pounds ($655 million) to investors after selling assets.
Schneider Electric SA fell 1.3 percent, to 90.95 euros. The world’s biggest maker of circuit breakers said third-quarter sales rose 15 percent, driven by European demand for building controls. Sales growth will slow in 2007, Chief Executive Officer Jean-Pascal Tricoire said in a conference call following the release of results.