Most European Stocks Advance; Maersk, Hermes Gain on Earnings

May 11, 2011, 6:24 AM EDT By Julie Cruz

May 11 (Bloomberg) -- European stocks rose for a second day as better-than-estimated results from A.P. Moeller-Maersk A/S to Hermes International SCA boosted confidence in the economic recovery. Asian shares and U.S. index futures also gained.

Maersk jumped 4.1 percent as the owner of the world’s largest container line said net income surged 85 percent. Hermes gained 3.3 percent after sales increased as wealthy consumers purchased more luxury watches and fragrances. ITV Plc slid 2.6 percent as the U.K.’s biggest commercial broadcaster forecast slowing advertising revenue growth.

The benchmark Stoxx Europe 600 Index advanced 0.6 percent to 284.66 at 11:01 a.m. in London. The gauge has gained 8.6 percent from this year’s low on March 16 as companies including PSA Peugeot Citroen and Ericsson AB reported results that topped analysts’ estimates and the U.S. Federal Reserve maintained its pledge to keep interest rates low for an extended period.

“Outlook statements from companies are more positive than expected, showing companies are really confident,” said Matthias Joerss, a Frankfurt-based strategist at Macquarie Group Ltd. “However, going forward, the earnings season will become less important and the sovereign debt crisis is still a main issue. We will also see slowing macroeconomic leading indicators.”

Standard & Poor’s 500 Index futures gained 0.3 percent today and the MSCI Asia Pacific Index advanced 0.6 percent.

Company Earnings

Of the 255 companies in the Stoxx 600 that have reported earnings since April 11, 148 have beaten analyst forecasts for per-share profit, according to data compiled by Bloomberg. That compares with 72 percent of U.S. companies in the period.

Company earnings offset reports from China’s statistics bureau and central bank showing inflation in the country held above 5 percent in April and lending exceeded analysts’ estimates, signaling that further monetary tightening may be needed to cool the fastest-growing major economy. Consumer prices rose 5.3 percent from a year earlier and banks extended 740 billion yuan ($114 billion) of local-currency loans.

Another release today showed German inflation accelerated more than initially estimated in April after energy costs surged. The inflation rate, calculated using a harmonized European Union method, jumped to 2.7 percent from 2.3 percent in March, the Federal Statistics Office in Wiesbaden said.

The Bank of England said the outlook for growth has deteriorated in the past three months and that it sees inflation “markedly higher” in the near term. The central bank said inflation may reach 5 percent later this year.

Greek Aid

European leaders slowed debt-wracked Greece’s drive for extra aid, saying the Athens government must first make good on pledges to overhaul an economy mired in a three-year recession. German Chancellor Angela Merkel said Greece needs to meet strict terms to deserve credits beyond the 110 billion-euro ($158 billion) lifeline granted a year ago.

“We can offer solidarity only if Greece’s stability and eagerness to reform is proven,” Merkel told reporters in Berlin yesterday. “We can get out of this difficult situation only if we properly rebuild that foundation, not just help without Greece doing anything.”

Maersk jumped 4.1 percent to 51,350 kroner. The company posted first-quarter net income before minority interests of 6.35 billion kroner ($1.2 billion), compared with an average estimate of 4.89 billion kroner in a Bloomberg survey of five analysts.

Hermes, Storebrand Gain

Hermes rallied 3.3 percent to 167.10 euros, the highest price since October. The French maker of Birkin handbags and silk scarves reported first-quarter sales that increased 26 percent, beating analysts’ estimates.

Storebrand ASA gained 1.6 percent to 51.65 kroner as Norway’s largest publicly traded insurer said the developments in financial markets thus far in 2011 provide a basis for continued positive growth in its core markets.

Bourbon SA rose 5.4 percent to 34.35 euros in Paris trading, the largest gain in seven months. The owner of the second-biggest fleet of supply and crew ships for the oil industry reported a 24 percent increase in first-quarter revenue and said demand is being boosted by the price of crude and investments by oil companies.

Axel Springer AG jumped 3.8 percent to 112 euros after Europe’s largest newspaper publisher said first-quarter profit before some items rose 6.5 percent as international and online business revenue made up for a weaker German advertising market.

ITV slid 2.6 percent to 73.9 pence as the broadcaster forecast first-half advertising revenue growth will slow and it may underperform the market as clients cut spending budgets.

--Editor: Andrew Rummer

To contact the reporter on this story: Julie Cruz in Frankfurt at jcruz6@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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