[ad_1]
Europe’s fourth-quarter earnings season is still in its early stages, but Europe’s biggest companies are mostly doing well.
Novo Nordisk NVO,
The maker of the wildly popular weight loss drug on Wednesday issued an outlook that beat expectations and suggested analysts needed to further raise their outlook. LVMH Moët Hennessy MC,
The luxury goods giant reported better-than-expected sales growth and impressive cost control. ASML Holding ASML,
The maker of microchip manufacturing equipment reported a faster-than-expected increase in orders despite exports being hampered by the U.S.-China tech war. SAP SAP,
Oracle’s biggest rival, the German database provider, boosted its profit outlook.
Of course, there were some outliers. Novartis NVS,
For example, although disappointing, it was a strong quarter for major European companies.
If there’s one thing that manufacturers of injectable drugs, handbags, and lithography systems all have in common, it’s that none of them depend on Europe for their sales.
More than half of Novo Nordisk’s sales come from the United States, with Europe, the Middle East, and Africa overall accounting for just over 20%. LVMH’s regional breakdown is more balanced, although Europe’s 25% share is supported by sales to Asian tourists visiting Paris. Only 4% of ASML’s shipments last year went to Europe, the Middle East, and Africa.
Indeed, Europe’s biggest companies have long adapted to the continent’s stagnant economy. This was highlighted this week by data showing that the eurozone economy grew just 0.5% last year, compared to 2.5% in the United States. The US economy exceeds the Eurozone’s GDP by more than 20%.
Goldman Sachs said European profits, weighted by market capitalization, rose an unexpected 2%. In contrast, an equally weighted look at European returns yields a 1% error.
The smallest 200 stocks in the Stoxx 600 XX:SXXP report a 5% outlier, which Goldman attributes in part to “high domestic exposure.”
[ad_2]
Source link
