For the 2nd straight day, European stocks went ahead. It actually erased an earlier decline and numerous companies such as PSA Peugeot Citroen and Heineken NV reported results which were better than the initial estimates. Apart from that, the Euro region industrial output also increased more than the estimates. The third largest brewer in the world, Heineken actually rallied to a record high. The company’s shares increased by 5.7% and are currently at 54.93 Euros. This marks its highest price since October, 1989. Excluding certain items, the earnings before taxes and interests, jumped up to 2.9 billion Euros. The earnings were 2.7 billion Euros only a year ago. The earnings were higher than the estimated 2.85 billion Euros.
On the other hand, PSA Peugeot had its best day in last 30 days. The largest automaker of France reported the operating loss to be lower than initial predictions. The shares advanced by 7.3% and are at 6.40 Euros currently. This marks the company’s biggest single day gain since 4th January. The profit was of 1.09 billion Euros in 2011, however, the same turned into a loss of 576 million Euros in 2012. The loss was still narrower than the initially predicted 647 million Euros though. Incidentally, Peugeot is the second biggest carmaker in the entire Europe.
The benchmark gauge Stoxx Europe 600 Index increased by 0.4% and is at 288.27 currently. The gauge experienced a drop of 0.3% in the initial hours of the day, but, recovered from there at a later time. In 2013, the gauge has gained around 3.1% as the US lawmakers agreed over a budget deal.
According to the Fund Manager of Notz Stucki, Pierre Mouton, there have not many earnings disappointments in this year so far and hence, many have started predicting what is in store for the next quarter. Pierre added that the macro economy is on an improving note as well and in Europe at least, things are going towards the correct direction. Pierre commented further that as there is lot of positivity on the stocks, the possibility is pretty high that the companies will beat expectations in the next quarter as well.
More than 54% of the Western European companies which have reported earnings this year since 8th January, incidentally, have shown better results than initial projections. The revenue forecast was surpassed by 51%.