A rush of earnings and guidance notes from Unilever, BASF, Roche and others presents a mixed picture of the fortunes of Europe's companies - and has some questioning the strength of the euro zone recovery. David Pollard reports.
Taxiing for take-off - though take-off still might be some way away, at least for Europe's corporates. On what's been dubbed earnings 'Super Thursday' because of the sheer number of results and corporate updates, a mixed picture emerged at best. Top of the list of those that disappointed: consumer goods group Unilever on lower-than-expected quarterly sales. It talks of a slowdown in emerging markets - but developed markets not doing so well, either. BASF shares were down too on its earnings - a strong euro lowering the value of its overseas chemical sales. And Kingfisher, Europe's home improvements giant, says its markets were weaker than expected, especially France and Germany. What does it all say for the euro zone? Sarah Hewin is regional head of research at Standard Chartered. SOUNDBITE (English) Sarah Hewin, Regional Head of Research at Standard Chartered, saying: ''Well, the macro picture is not as strong as I think most of us would have hoped at this stage. We had an initial flurry of optimism at the start of the year when it looked as if growth was going to be coming back pretty firm. But over recent months, some of the momentum has faded.'' There are bright spots. Nokia saw strong interest after revealing better-than-expected margins for its core networks business. Oil major Repsol said a surge in refining margins helped it beat forecasts. And drugmaker Roche confirmed full-year sales and profit targets, its numbers broadly in line with expectations. European corporates may still have some way to go before they catch up with their peers in the U.S. There, it's estimated nearly two-thirds of companies reporting their Q2 numbers have beaten expectations so far. Joe Rundle of ETX Capital says that for European stock pickers, there are some sectors to watch. SOUNDBITE (English) Joe Rundle, Head of Trading, ETX Capital, saying: ''There are some gems in the euro zone. I would be really particularly interested in the auto-making sector, because I do think there is potential huge growth in that coming for that from the Far East, and some banks as well I think are good bets in the EU compared to the US. I think the valuations in Europe are probably cheaper so offer better value.'' As for easyJet: its shares dropped four percent in a first reaction to it easing back on guidance for full-year profits. For it and some others, Super Thursday perhaps not so super after all.