By Sarah Jones
July 22 (Bloomberg) -- European stocks, and U.S. index futures fell after American Express Co. and Ericsson AB reported earnings that missed analysts' estimates and forecasts at Vodafone Group Plc and Apple Inc. disappointed investors. Asian commodity shares rose.
Ericsson dropped after the world's largest maker of wireless networks said second-quarter profit slumped. Vodafone, the biggest mobile-phone company, tumbled 10 percent after saying full-year sales are now predicted to be ``around the bottom'' of its target. American Express, the biggest U.S. credit-card company by purchases, and Apple slipped in Europe.
``What we are seeing today is the product of the global economy rolling over and the second round effects from the credit crunch,'' said Kevin Lilley, a London-based fund manager at Royal London Asset Management which oversees about $63 billion. ``We are now seeing the impact that has had on consumer and business spending.''
Europe's Dow Jones Stoxx 600 Index lost 0.9 percent to 279.71 at 8:05 a.m. in London, while futures on the Standard & Poor's 500 Index fell 0.7 percent. The MSCI Asia Pacific Index increased 1.7 percent.
About $13 trillion has been wiped off the value of global equities since October as financial companies notched up more than $452 billion in credit-related losses. Banks worldwide have raised more than $333 billion to offset losses stemming from the financial-market turmoil and slowdown in lending.
Profit Outlook
Analysts estimate profit for companies in the Stoxx 600 will decline 2.4 percent in 2008, Bloomberg data show. That's down from 11 percent growth predicted at the start of the year.
Profit at S&P 500 companies fell 16 percent in the second quarter, the fourth straight decline, according to analysts' estimates. That would be the longest streak in six years, Bloomberg data show.
Ericsson sank 7.6 percent to 69.4 kronor. Second-quarter profit fell 70 percent to 1.9 billion kronor ($320 million). Analysts surveyed by Bloomberg had estimated profit of 2.82 billion kronor and revenue of 48.1 billion kronor.
Vodafone dropped 10 percent to 134.5 pence. The company said full-year sales are now predicted to be ``around the bottom'' of the targeted 39.8 billion pounds ($79.7 billion) to 40.7 billion pounds outlook range, ``reflecting first-quarter performance, recent economic weakness and lower than expected equipment revenue.''
`Big Problem'
``The economic slowdown is starting to happen,'' said Andy Lynch, a London-based fund manager at Schroder Investment Management, which has about $10 billion. ``Now we've got a really big problem. We're not just talking about it. We're seeing it in the numbers'' in Vodafone.
American Express slumped 12 percent to $36.11 in Germany. The biggest U.S. credit-card company by purchases withdrew its 2008 earnings forecast after second-quarter profit declined 37 percent.
Apple dropped 11 percent to $147.81 in German trading. The maker of the iPod music player yesterday said fourth-quarter profit and sales will fall short of projections.
Shares of Norsk Hydro ASA declined 1.7 percent to 62 kroner. Europe's second-largest aluminum producer said second- quarter profit fell 87 percent to 786 million kroner ($155 million), as energy and raw material costs gained. That missed the 1.18 billion-kroner median of four analyst estimates compiled by Bloomberg.
STMicroelectronics NV, Europe's largest chipmaker, fell 3.6 percent to 6.98 euros after Texas Instruments Inc. forecast third-quarter earnings that missed analysts' estimates because of slowing demand for its chips.
Infineon AG, Europe's second-biggest chipmaker, slipped 3.6 percent to 5.05 euros.
To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.
Posts
No comments:
Post a Comment