In Europe on Thursday, the FTSE Eurofirst 300 was up 0.6 percent to 1,339.02. That was its highest close in over 4 years. At least part of the day’s advance was due to favorable earnings reports in several sectors.
In the banking sector, Societe Generale reported a higher than predicted rise in fourth-quarter profits, which it said were up by 42 percent due to higher revenues in its investment and banking units. This news saw its shares rise 4 percent to €118. Meanwhile, Zurich Financial Services gained 6.1 percent to SFr314 on a reported rise in full-year profits last year and predictions that the trend will continue this year. Also in Switzerland, Julius Baer gained 9.3 percent on the day to SFr112 after it said that outflows had slowed due to smaller than predicted withdrawals by clients unhappy with corporate moves last year.
In the telecommunications sector, Telnor of Norway announced a jump in fourth-quarter profits due to strength in its international subsidiaries. This included a doubling of revenues in its majority-owned Ukranian company Kyivstar. Telnor’s shares saw a 4.4 percent gain on the day to NKr71.25.
Cosmetics company L’Oreal was up 1 percent to €69.60 on news that it had its twenty-first consecutive yearly rise in profits. However, some analysts were worried that the profits had been achieved by cutting advertising and promotion, which was called unhealthy for the company’s long-term prospects.
Not all positive earnings reports translated into gains in share price on the day, however. Although its luxury Mercedes unit helped DaimlerChrysler beat fourth-quarter earnings predictions, the carmaker saw its shares decline 3.5 percent on the day to €48.33.
Other losers on the day included Deutsche Post, which dropped 2.2 percent to €22.08 on disappointing full-year earnings news and a downgrade from Deutsche Bank from “buy” to “hold”. Autostrade, the largest toll road operator in Italy, lost 0.8 percent to €22.18 on a warning that its estimates of the increase in traffic volume on its roads in 2005 had been significantly higher than actual traffic increases.
