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Margins in focus as results drive big swings in European stocks

Published 2019-02-22, 12:13 p/m
© Reuters.  Margins in focus as results drive big swings in European stocks

* STOXX 600 up 0.2 pct

* Sopra Steria soars on better margin outlook

* Elekta tumbles after results

* ASM International bucks chip trend

By Helen Reid

LONDON, Feb 22 (Reuters) - Europe's main share benchmarks rose marginally on Friday but company results including Sweden's Elekta and France's Sopra Steria drove big swings in stocks as investors awaited news from crucial U.S.-China trade talks.

The STOXX 600 .STOXX and Germany's DAX were up 0.2 and 0.3 percent respectively, with the main action at the share level.

Sopra Steria SOPR.PA topped the STOXX 600, up 17.8 percent after the French IT services and consulting firm reported full-year results and said it was targeting an improvement in margins this year. should help ease concerns of on-going pricing pressure as the worst seems to be behind us now following the profit warning in Q3 2018," said Georgios Kertsos, an analyst at Berenberg.

Chipmaker ASM International ASMI.AS jumped 11.9 percent after it said fourth-quarter order intake hit a record high of 301.6 million euros, well above its forecast. strong results bucked a trend of weakness in a semiconductor sector hit by trade tariffs and slowing global car demand.

Swiss construction chemicals maker Sika SIKA.S also rose 4 percent after full-year profit beat expectations. EKTAb.ST brought up the rear with a 13.5 percent slide after the Swedish radiation therapy equipment maker reported third-quarter earnings well below market expectations, and cut its full-year margin forecast. pressure has been a broader theme across European shares this earnings season, with the gap between revenue beats and earnings beats growing as companies face rising costs.

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According to UBS strategists this gap has reached an eight-year high.

Elsewhere the food and beverage sector .SX3P was the worst-performing, down 0.8 percent, after U.S.-based Kraft Heinz KHC.O reported weak results. Inbev ABI.BR fell 3.6 percent, Nestle NESN.S lost 0.9 percent and Danone DANO.PA dipped 0.5 percent. Unilever ULVR.L also dropped 1.6 percent.

Kraft Heinz and AB InBev share a stakeholder: 3G Capital.

RBC analysts said that "given overlapping ownership between the two companies and similar cultures of margin maximisation, we wouldn't be surprised if investors make some connection."

In other results, Saint Gobain SGOB.PA shares fell 1.6 percent after the company reported a slump in annual net profit, blaming asset impairments amid uncertainty over the economy. meal vouchers firm Edenred EDEN.PA jumped 5.3 percent after reporting record 2018 earnings and sounding a confident note about growth this year. the UK, M&A livened up trading. Dairy Crest DCG.L shares surged 15.3 percent after Canada's Saputo SAP.TO bought Britain's largest dairy food company for about 975 million pounds ($1.3 billion). Earnings growth expectations across world Feb 22

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