Friday 23 April, 10:15 AM BST (Thomson Financial): European markets are
off to a strong start from overnight gains on Wall Street coupled with good
corporate earnings on the continent. Ericsson posted better than expected
first quarter earnings with net income of 3 billion Swedish kronor compared to
a loss of 4.3 billion kronor in the same period last year. The company has
also raised its outlook for 2004. Volvo's net income almost tripled to 2,248
million Swedish kronor from 506 million kronor in the same quarter last year.
The automobiles sector is the leading intra-day performer, with strong gains
from DaimlerChrysler, which has decided not to participate in a capital
increase planned by Mitsubishi Motors Corporation (MMC) and to cease further
financial support for MMC.
London's FTSE-100 Index has risen by 15.80 points or 0.35% to 4587.60,
while Paris's CAC-40 Index has climbed by 33.53 points or 0.89% to 3819.08.
Milan's MIB-30 Index has gained 84 points or 0.29% to 28,628 and Frankfurt's
DAX Index is trading up by 58.51 points or 1.44% to 4117.66.
* Ericsson released better than expected first quarter results as net
income came in at 3 billion Swedish kronor from a loss of 4.3 billion
kronor in the same period last year. Operating income was 4.5 billion
kronor from a loss of 2.8 billion kronor in 2003, while the gross margin
improved to 44.7% from 34.1% in 2003. The main reasons for the
improvement were better than anticipated benefits from cost of sales
reductions activities and a favourable product mix. Sales rose to 28.1
billion kronor, an increase by 9% year-over-year. High-growth markets
such as China, Brazil and Mexico, were main contributors to this
development. Currency exchange effects were 8%. Due to seasonality,
sales declined by 22% sequentially. Orders booked amounted to 33.0
billion kronor, an increase by 22% year-over-year, driven by generally
strong development in Asia-Pacific, Central Europe, Middle East and
Africa. Sequentially, orders booked increased by 12%. The company
estimates that the global mobile systems market in 2004, measured in
U.S. dollars, will show slight to moderate growth, compared to 2003.
This improved outlook is mainly driven by growing traffic, network
expansions and continued 3G rollout. There is also an element of
operators catching up on previous years' limited investments.
* Volvo unveiled first quarter net income of 2,248 million Swedish kronor
from 506 million kronor in the same quarter last year. Income per share
for the first three months was 5.40 kronor from 1.20 kronor in 2003,
while income per share for the most recent 12-month period amounted to
4.90 kronor. Net sales for the first quarter of 2004 increased to 45,489
million kronor compared to 40,931 million kronor in the same quarter
last year, reflecting strong organic growth.
* DaimlerChrysler has decided not to participate in a capital increase
planned by Mitsubishi Motors Corporation (MMC) and to cease further
financial support for MMC. DaimlerChrysler said that following the fall
in MMC's earnings in 2003, a new business plan had been instigated,
although this required substantial financial resources.
* GlaxoSmithKline announced that the U.S. Food and Drug Administration had
approved the use of Advair 100/50 in children of four years to eleven
years of age with asthma who are symptomatic on inhaled corticosteroid
therapy alone. Advair contains an inhaled corticosteroid and a long-
acting beta2-agonist and is the only long-term preventative product that
treats the two main components of asthma - airway inflammation and
bronchoconstriction.
* Infineon Technologies announced a capacity expansion at its Virginia
subsidiary semiconductor plant, Infineon Technologies Richmond, LP. The
expansion will begin with an initial equipment move in to start
production of advanced DRAM chips on 300mm wafers beginning in early
2005. Infineon said the US$1 billion expansion project would increase
flexibility and responsiveness to customer requirements for its memory
and logic products.
Simon.Tse@thomson.com; Thomson Financial
This is Thomson Financial Corporate Group's Europe Market Commentary. The
information herein is believed to be true and accurate. If you have any
questions please e-mail James Sang at james.sang@tfn.com. For more information
about Thomson Financial, please visit our web site at
http://www.thomsonfinancial.com. For more financial information at your fingertips,
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SOURCE Thomson Financial Corporate Group
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