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Market Update

Adidas Lowers Outlook; Nestle Earnings Hit by Strong Franc


Author: Nigel Thomas
ticker.com
Last Update: 11:20 AM ET August 07 2014

4:00 PM Frankfurt adidas net plunged 27% to 348 million on 2% sales decline. Commerzbank net profit more than doubled. Nestle profit declined 10% to 4.6 billion francs after revenue fell 5%. Rio Tinto profit surged 156% to $4.4 billion. Zurich Insurance net soared 14% to $2.1 billion.

In London trading, FTSE 100 index slid 0.2% or 11.02 to 6,625.14 and in Frankfurt the DAX index fell 0.3% or 25.09 to 9,104.95.

In Paris, CAC 40 index dropped 0.7% or 27.92 to 4,179.22.

adidas AG declined 4.2% to 55.65 after the Germany-based sports footwear, apparel and accessory maker reported net sales in the first-half ending in June dropped 1.9% to 7 billion from 7.13 billion a year ago period.

Net income in the period plunged 27.4% from a year ago period to 348 million compared to 480 million and diluted earnings per share dropped to 1.67 from 2.29.

Adidas also lowered operating margin outlook to a range between 6.5% and 7% from the earlier estimated range between 8.5% and 9%.

Adidas has declined 37% in the year-so-far and the stock is the worst performer in the benchmark DAX Index in Germany. The stock has lost 17% since the announcement of second-quarter report on July 31.

Last week, adidas lowered its 2014 earnings outlook to 650 million euros from the previous estimate between 830 million and 930 million euros.

Commerzbank AG gained 2.2% to 10.65 after the Germany-based bank said revenue in the second-quarter ending in June dropped 3% to 2.24 billion from 2.31 billion a year ago period.

Net profit in the quarter surged 150% from a year ago to 100 million compared to 40 million.

As of June, the lender said total assets for the group jumped to 583 billion from 550 billion in the second-half ending in December.

Nestle SA jumped 3.5% to 69.45 francs after the Switzerland-based food and beverage maker reported total sales in the first-half ending in June dropped 4.8% to 42.98 billion francs from 45.17 billion francs a year ago period.

Net profit in the period declined 9.6% from a year ago to 4.63 billion francs compared to 5.12 billion francs and earnings per share slumped to 1.45 francs from 1.60 francs.

Rio Tinto Plc rose 0.3% to 3,399.50 pence after the Anglo-Australia resource company reported revenue in the first-half ending in June slipped 0.7% to $24.34 billion from $24.51 billion a year ago period.

Profit in the period surged 155.8% from a year ago to $4.40 billion compared to $1.72 billion and diluted earnings per share soared to 237 cents from 92.6 cents.

The miner said as of June, net debt dropped 27.1% to $16.1 billion from $22.1 billion and reduced adjusted total borrowings by $2.5 billion to $25.7 billion from a year ago period.

Zurich Insurance Group Ltd climbed 3.1% to 268.60 francs after the Switzerland-based insurance company reported total revenue in the first-half ending in June increased 2.1% to $35.04 billion from $34.31 billion a year ago period.

Net income in the period soared 14% from a year earlier to $2.11 billion compared to $1.85 billion and diluted earnings per share jumped to $14.21 to $12.50.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc