Europe stocks fall as earnings disappoint; Philips down 13% – CNBC

Dutch tank storage group Vopakshares fell 7.4% on Wednesday after reporting a year-over-year decline in full-year earnings.

The company recorded a 7.7% decline in annual revenue to 1.32 billion euros ($1.37) compared to 2023 EUR 1.43 billion euros.

“The performance of the gas terminal demonstrated the throughput level of companies supported by increasing energy demand and energy security considerations around the world,” Vopak said in a press release.

The shares opened Wednesday, and the S&P 500 was pulled back from its latest record a day ago.

The broad market index fell 0.22% alongside NASDAQ Composite. The Dow Jones industrial average fell 173 points (0.39%).

– Brian Evans

Bank of England policymakers are overly concerned about the rise in UK inflation rates in January to an unexpected 3% of 3% in January, according to ING's developed market economist James Smith There's nothing to do.

“I think everyone was expecting this pickup in service inflation,” Smith told CNBC's Squawk Box Europe on Wednesday. He continued that components that have driven headline rise, such as airfares, private school fees and food prices, are not the focus of the UK Central Bank.

“Take out the loud stuff… the news is getting better. Its core, the service view is slowly falling.”

But wage and labor market trajectories are “the greatest uncertainty at present” among the most important factors for BOE, Smith said.

Money market pricing currently means that BOE interest rates will be retained in March after the January cut, referring to a half-point equivalent reduction by the end of the year.

– Jenni Reed

In the 12 months ending December 2024, the average UK home price rose 4.6% to £268,000 ($337,669), The National Bureau of Statistics said Wednesdayup from the 3.9% growth rate in November.

Meanwhile, the average private rents said it had risen 8.7% in the 12 months leading up to January, slightly cooled from 9% in December. The average rent in the UK was £1,375, £780 in Wales and £995 in Scotland.

“It's not surprising that prices have continued to hold or rise over the last 12 months as demand for both the purchase and rental markets is still above the top,” says Justin Moy, managing director at EHF Mortgages. said in an emailed comment.

“Small landlords sell for rentals, and business landlords take on the market share at a pace, but for first-time buyers, the opportunity to own a home, even if the mortgage rate is high, is still high. It's still attractive.”

– Jenni Reed

Stocks listed in London HSBC It rose 0.7% in morning trading, overturning previous small losses after banks announced a stock repurchase of up to $2 billion and a 6.5% increase in annual pre-tax profit.

Despite analysts at Deutsche Bank “hold” the stock from “buy” to “hold” the stock, and writing that “after a massive rise in stock prices, it is no longer worth it in our view.” , profits were brought.

“HSBC doesn't need to do much to maintain healthy teen memorization [return on tangible equity] After years of restructuring. We expect the gradual restructuring to be relatively small and aim to maintain a level of memorization against a global decline in cost-based overall,” they said in a memo on Wednesday.

“We believe that if the scale of the restructuring is contained, our expectations of capital return may not change. This is one of the key attractions of stocks.”

HSBC's stock has been making significant profits in recent years, adding 26.5% in 2024, already an additional 14% increase from the previous year.

UBS analysts said Wednesday that the bank made profits before the tax 9% above the consensus in the fourth quarter of 2024, but investors' focus was “to bring long-term growth at attractive prices.” He said it depends on whether it is possible.

– Jenni Reed, Ganesh Rao

European stock markets were mixed with the region early on Wednesday Stoxx 600 An index that moves on either side of the flat line.

Germany's Dachshund Controlled 0.28% gain during France CAC40 It was 0.12% lower, and it was in the UK. FTSE 100 0.26% soaked.

The UK's largest defense company BAE System On Wednesday, that order backlog rose 11% at the end of 2024, reaching a record high. It has been reported Annual revenues increased by 14% in 2024.

Operating profit rose 4% over the period to £2.69 billion ($33.9 billion).

“Based on the exceptional visibility of our record backlog and the sustainability of our value compound business model, we are confident in our business's positive momentum for the future,” said CEO. Charles Woodburn said in a statement.

The BAE System and other European defense companies are recording share profits this week based on expectations of an increase in government spending.

In an email comment, Quilter Cheviot equity analyst Matt Dorset said the results were completely exceeding consensus expectations, including revenue per share, organic sales and underlying revenue. .

“We continue to see the structural tails that support the BAE, driven by an increase in global defence spending,” Dorsett said.

“As a larger defense budget will only drive demand, Europe will likely focus on strengthening its own defense production capacity rather than relying on US exports.”

“BAE Systems is well-placed to leverage this as a PurePlay defense company that is heavily exposed to European demand.”

– Jenni Reed

Data released by the National Statistics Office on Wednesday showed that in January it was higher than analysts' expectations, with annual UK inflation rising to 3%.

The economists voted by Reuters were hoping for a 2.8% read.

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– Holly Eliatt

Phillips CEO Roy Jakobs said on Wednesday that the recovery in China's consumer demand was a story “when it isn't” after the medical technology giant reported a double-digit decline in Chinese sales.

“we believe [Chinese demand] It's back in the long run, and while it's fascinating, I don't know when it's going to happen or when it's going to hit that inflection point,” Jacobs told CNBC's “Squawk Box Europe.”

Jacobs said the importance of healthcare for the country's aging population means that escalating demand will begin to accumulate and foresee the strength of North American sales.

Regarding risks to businesses from President Donald Trump's tariff threat, Jacobs said Phillips has already reduced exports from China to the US, including impacts in current guidance.

He said that “uncertainty about tariffs” provided us with wide-adjusted revenue prior to the 2025 interest, tax, depreciation and amortization (EBITDA) margin outlook from 2025 to 80 basis points. He added that it is a reason.

Phillips reported a 1% increase in comparable sales growth in both the fourth quarter on Wednesday and in 2024 for the full year. That net loss has grown from 463 million euros per year to 698 million euros ($729.9 million), with four quarters performance from 308 million euros per year to 333 million euros losses It has decreased. That weak annual loss was attributable to a provision of around 1 billion euros after settling in a long-term US incident surrounding its response device.

Jacobs said 2024 was a “vital” year for Phillips, reducing responsibility and improving basics, including increased margins and strong cash generation.

– Jenni Reed

Netherlands Healthcare Technology Group Phillips on wednesday It has been reported North American strength was offset by double-digit declines in China, resulting in a comparable sales growth rate of 1% in the fourth quarter and 1% for the full year of 2024.

Quarterly figures were below market expectations, according to Reuters.

Sales fell in diagnostics and treatments and personal health units, with a 7% increase in the connected care business.

The company said its outlook was a sales growth rate of 1%-3% in 2025, with a moderate to high digit decline in China.

The European market is scheduled to open in the mixed territory on Wednesday.

UK FTSE 100 The index is expected to open 8,763, with 5 points for Germany Dachshund France's 22,868 increased 9 points CAC 8,209 and 12 points down in Italy ftse mib According to IG data, 38,686 is 58 points higher.

The revenue comes from BAE System, Glencore, Rio Tinto, Koninklijke Philips and Carrefour.

Wednesday's data release includes the latest UK inflation data. Economists voted by Reuters predict that the UK's consumer price index rose to 2.8% from 2.5% the previous month.

– Holly Eliatt