Subdued Outlooks for Telecoms and Pharma Giants: Earnings Wrap

(Bloomberg) -- European company earnings reports were mostly subdued, with cautious guidance from telecom-equipment operator Nokia Oyj and drugmaker Roche Holding AG, and Commerzbank AG racking up a $3.5 billion loss tied to the pandemic.

Nokia showed the Reddit day traders who caused the stock to surge last week that the underlying business is not so rosy, with sales continuing to fall. Among Roche’s difficulties are missed hospital appointments due to Covid-19, delaying treatments. Royal Dutch Shell Plc reported a slump in fourth-quarter cash flow.

There was better news from consumer-goods giant Unilever Plc, which forecast multiyear sales growth, and Sweden’s Nordea Bank Abp, with CEO Frank Vang-Jensen saying Nordic economies are handling the crisis well. Deutsche Bank AG posted its first annual profit in six years. Another winner was Swiss industrials stock ABB Ltd., which beat estimates and said China has been a standout market.

Thus far, earnings for the fourth quarter have beaten expectations by 13% in the largest positive surprise since the global financial crisis, Goldman Sachs Inc. strategist Peter Oppenheimer said in a note on Friday. The latest round of Covid-19 restrictions had a “notably smaller” impact on earnings than the first lockdowns given factories and schools largely remained open, Oppenheimer added, while predicting earnings in 2021 will rebound by 40% year-on-year. The Stoxx Europe 600 equity index is up about 2% year-to-date and more than 45% since the March 2020 low.

Key Developments:

Here’s the top earnings news for today by sector:

Financials

Energy

• Royal Dutch Shell Plc’s adjusted profit for the fourth quarter missed the average analyst estimate.
• Aker BP ASA reported net income in the quarter that beat the average analyst estimate.

Technology

Communications

• BT Group Plc reported adjusted Ebitda for the third quarter that beat the average analyst estimate.
• Swisscom AG forecast profit for 2021 that was in line with forecasts.

Consumer

• Unilever‘s underlying sales for the fourth quarter topped consensus.
• Pandora A/S posted Ebit for the fourth quarter that missed the average analyst estimate, while revenue and net income beat.

Pharmaceuticals

• Roche forecast modest growth in annual sales and profit as cheaper biosimilar copies of its aging cancer medicines keep eroding drugs revenue and as the pandemic delayed treatments.

Materials:

• Outokumpu Oyj reported adjusted Ebitda for the fourth quarter that beat the average analyst estimate.
• Norske Skog ASA posted profit for the fourth quarter that exceeded the average analyst estimate.

Industrials

• ABB reported fourth-quarter profit that beat the average analyst estimate.
• Securitas AB’s adjusted earnings per share for the quarter missed the average analyst estimate.

©2021 Bloomberg L.P.