Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Europe Inc earnings offer market optimists more hope

Europe Inc earnings offer market optimists more hope

Earnings from major European companies on Wednesday offered some reasons for optimism about the region's corporate health, even as investors worry about the slowing global economy.
Earnings from major European companies on Wednesday offered some reasons for optimism about the region's corporate health, even as investors worry about the slowing global economy.

Fourth-quarter earnings from ASML Holding NV (ASML.AS) exceeded expectations and the Dutch technology company, Europe's largest, forecast a rise of more than 25% in 2023 sales despite possible new curbs on exports to China.

CEO Peter Wennink said that although economic uncertainty and growing semiconductor inventories were clouding the outlook, customers see conditions improving towards the end of the year and China's economy recovering after COVID-19 curbs were ended.

"That means that the demand is still higher than what we can make," he said. Shares in ASML were lower after the results, having rallied recently to hit their highest since last April.

Shares in budget airline easyJet EZJ.L shot up more than 10% to their highest since June after it said it expected to beat market expectations this year based on the strength of bookings into summer.

Rivals Ryanair (RYA.I), Wizz Air (WIZZ.L) and BA-owner IAG (ICAG.L) got a lift too, as investors cheered the latest evidence that people will not sacrifice their holidays even as double-digit inflation leaves them with less money to spend.

Helped by strong orders in Europe, French train maker Alstom (ALSO.PA) posted an 8% rise in third-quarter sales. Its shares fell after hitting their highest in almost a year in early trade.

While it is still early in the corporate earnings season, the results offer some hope that recent economic data which has buoyed equities this month is grounded in reality.

Expectations that the economy will make a soft landing in 2023 have grown as a result of China's reopening from three years of zero-COVID policies and the fact that Europe has managed to keep the lights on through the winter, helped by warmer weather and ramped-up energy capacity.

IMF Managing Director Kristalina Georgieva said last week that the Fund's new 2023 global growth forecast, due soon, could be revised upwards slightly from a current 2.7% - a turnaround from the gloomy tone she had struck at the start of the year.

Even Germany, one of the economies most exposed to last year's soaring energy prices, is now expected to dodge a recession in 2023.

French central bank chief Francois Villeroy de Galhau said last week that the euro zone was looking more resilient than expected and should avoid a recession this year.

On Monday, a key U.S. survey showed businesses see lower odds that the United States is already in or will fall into recession this year.

That greater economic optimism has in turn raised hopes that the corporate downturn may not be as severe as feared just a few weeks ago.

The pan-European STOXX 600 index (.STOXX) is up more than 6% since the start of the year, hitting its highest since April last week after better-than-expected economic data.

The index is on course for its best January since 2015. It ended the day down 0.45%.

Results on Thursday from heavyweights SAP (SAPG.DE), Nokia (NOKIA.HE), Diageo (DGE.L) and LVMH (LVMH.PA) will be a further test.

BARELY ANY GROWTH

Expectations for fourth-quarter 2022 earnings and revenues have dimmed further, however, with Refinitiv I/B/E/S data on Tuesday suggesting European companies will see barely any revenue growth.

Sentiment on Wall Street took a turn too, as Microsoft's (MSFT.O) outlook weighed down technology stocks, and after a bleak quarterly report from Boeing.

"After a couple of strong days for Wall St on expectations the Fed is about to pause, earnings are just looking a bit wobbly," said Market.com analyst Neil Wilson.

AT&T Inc (T.N) forecast annual profit below expectations while U.S. defence contractor General Dynamics (GD.N) reported better-than-expected fourth-quarter profit, boosted by higher demand for weapons at its unit that produces Abrams tanks and combat systems.

Tesla (TSLA.O) will report after market close later on Wednesday.

Not everything was rosy in Europe. Swiss fragrance and flavour maker Givaudan (GIVN.S) posted a slowdown in end-year sales, putting further strain on margins in a year marked by high input costs and supply chain disruptions.

Swiss asset manager GAM (GAMH.S) meanwhile warned on profits after experiencing negative asset flows, knocking its shares 2.5% lower in early morning trading.

($1 = 0.8115 pounds)
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Putin Celebrates ‘Unprecedentedly High’ Ties with China as Gazprom Seals Power of Siberia-2 Deal
China Unveils New Weapons in Grand Military Parade as Xi Hosts Putin and Kim
Rapper Cardi B Cleared of Liability in Los Angeles Civil Assault Trial
Google Avoids Break-Up in U.S. Antitrust Case as Stocks Rise
Couple celebrates 80th wedding anniversary at assisted living facility in Lancaster
Information Warfare in the Age of AI: How Language Models Become Targets and Tools
The White House on LinkedIn Has Changed Their Profile Picture to Donald Trump
"Insulted the Prophet Muhammad": Woman Burned Alive by Angry Mob in Niger State, Nigeria
Trump Responds to Death Rumors – Announces 'Missile City'
Druzhba Pipeline Incident Sparks Geopolitical Tensions
Cost of Opposition Leader Péter Magyar's Economic Plan Revealed
Germany in Turmoil: Ukrainian Teenage Girl Pushed to Death by Illegal Iraqi Migrant
United Krack down on human rights: Graham Linehan Arrested at Heathrow Over Three X Posts, Hospitalised, Released on Bail with Posting Ban
Asian and Middle Eastern Investors Avoid US Markets
Ray Dalio Warns of US Shift to Autocracy
Eurozone Inflation Rises to 2.1% in August
Russia and China Sign New Gas Pipeline Deal
Von der Leyen's Plane Hit by Suspected Russian GPS Interference in an Incident Believed to Be Caused by Russia or by Pro-Peace or by Anti-Corruption European Activists
China's Robotics Industry Fuels Export Surge
Suntory Chairman Resigns After Police Probe
Gold Price Hits New All-Time Record
UK Fintechs Explore Buying US Banks
Greece Suspends 5% of Schools as Birth Rate Drops
Apollo to Launch $5 Billion Sports Investment Vehicle
Bolsonaro Trial Nears Close Amid US-Brazil Tension
European Banks Push for Lower Cross-Border Barriers
Poland's Offshore Wind Sector Attracts Investors
Budapest Central European Fashion Week Kicks Off
U.S. Celebrates Labor Day
Hungarian National Team Captain Scores Epic Goal
EU is getting aggressive: Four AfD Candidates Die Unexpectedly Ahead of North Rhine-Westphalia Local Elections
Japanese Customer Sways from VW to BYD after “Unbelievable” Test Drive amid Dealership Expansion
Nestlé Removes CEO Laurent Freixe Following Undisclosed Relationship with Subordinate
Pickles are the latest craze among Generation Z in the United States.
Giuliani Seriously Injured in Accident – Trump to Award Him the Presidential Medal of Freedom
Deadline Day Delivers Record £125m Isak Move and Donnarumma to City
Nvidia Reveals: Two Mystery Customers Account for About 40% of Revenue
Woody Allen: "I Would Be Happy to Direct Trump Again in a Film"
Lula and Putin Hold Strategic BRICS Discussions Ahead of Trump–Putin Summit
White House Eyes Budapest for Peace Talks
Cave Diving Beneath the Streets of Budapest
Another American Restaurant Chain Opens in Budapest
Hungarian Opposition Politician Supports Ukrainian Commander
Opposition Leader Threatens Media Outlets
American Airlines Adds New Flights to Budapest
F1 Hungarian Grand Prix Wraps Up
WhatsApp is rolling out a feature that looks a lot like Telegram.
U.S. Trade Representative says Washington still negotiating trade deals after court rules tariffs illegal
Von der Leyen says Europe drawing up 'precise' plans to send troops to Ukraine
Kremlin accuses Europe of hindering Trump’s peace efforts in Ukraine
×