Foreign Stock Roundup: Toyota, Gol Linhas Beat, AstraZeneca, Fresenius Miss

Earnings numbers continued to guide Europe’s markets over last week. Though quarterly results did impact Asia’ stocks, events on Wall Street mostly guided the region’s stocks. Investors in Asia also digested mixed China economic data and a spike in oil prices. Meanwhile, concerns that president Termer would be unable to push through his pension reforms dragged Brazil’s stocks lower.

STOXX Declines as Earnings Results Guide Europe’s Stocks

Stocks across Europe gained marginally last Monday as investors digested earnings numbers and closely watched the spike in commodity prices. The STOXX 600 increased 0.1% with the index’s sectors ending mixed at the close of trading. Basic resources emerged as the leading gainer for the day, advancing 1.2%.

Meanwhile, prices of Brent and WTI crude jumped 2% in the aftermath of the Saudi corruption crackdown. The FTSE 100 inched up 0.03% but the CAC 40 and the DAX lost 0.2% and 0.1%, respectively.

The STOXX 600 declined 0.4% last Tuesday with nearly all prominent sectors closing the day with losses. Earnings numbers continued to dominate proceedings even as retail stocks closed 0.9% lower. Stocks of oil and gas companies gained 0.7% following a spike in oil prices caused by events in Saudi Arabia.

Earnings results continued to guide markets last Wednesday even as Europe’s stocks remained somewhat weighed down. The STOXX 600 closed 0.1% lower with its sectors ending the session on a mixed note. The FTSE 100 and the DAX increased 0.2% and 0.02%, respectively. However, the CAC 40 lost 0.2%. Stocks from the financial sector were impacted by earnings and concerns about the Trump administration’s ability to push through tax cuts.

The STOXX 600 dropped 1.1% last Thursday with all of the index’s sectors closing in the red. A series of earnings results from a number of industrial sectors weighed on the region’s stocks. Basic resources stocks suffered the heaviest losses, moving 2.4% lower. Mining stocks declined after a sharp drop in the price of metals. The FTSE 100, CAC 40 and DAX declined 0.6%, 1.2% and 1.5%, respectively.

Markets across Europe continued to suffer losses last Friday after profit taking ensued following a drop in the number of earnings released. The STOXX 600 lost 0.4% with nearly all major exchanges closing in the red even as industrial sectors closed mixed. Leading the gainers for the day were stocks of basic resources companies, which advanced 0.3%. Europe’s banks emerged as the second-largest gainers for the day.

Wall Street, Oil Prices Guide Asia’s Markets

Stocks across Asia gave a mixed performance last Monday as investors continued to receive quarterly earnings numbers and President Trump began his trip to the region. The Nikkei 225 inched up 0.04% after Japan’s markets reopened after an extended weekend break. The Kospi lost 0.3%, weighed down by large tech stocks. The S&P/ASX 200 dipped 0.1% following losses from financials. The Shanghai Composite and the Shenzhen Composite advanced by 0.5% and 1.2%, respectively.

A record jump in oil prices and stocks on Wall Street helped key Asian indexes notch up gains last Tuesday. The Nikkei 225 added 1.7% to close at a 26-year high. The Kospi dipped 0.2% even though energy and retail stocks notched up gains. The S&P/ASX 200 gained 1%, crossing the 6,000 barrier for the first time in nine years. The Shanghai Composite and the Shenzhen Composite increased 0.8% and 0.7%, respectively.

Markets across Asia closed mixed last Wednesday even as investors were left searching for direction after stocks closed mixed on Wall Street. The Nikkei closed 0.1% lower while the Kospi increased 0.3%. The S&P/ASX 200 inched up 0.03% higher. China’s trade data for October revealed a lower-than-expected jump in exports and a higher-than-expected increase in imports. The Shanghai Composite and the Shenzhen Composite added 0.04% and 0.05%, respectively.

The Nikkei 225 increased 0.2% last Thursday, giving up gains garnered earlier in the session when it advanced nearly 2%. This led to a mixed finish for stocks across Asia. The Kospi lost 0.1% while the S&P/ASX 200 added 0.6%. In October, China’s consumer and producer prices notched up gains, exceeding most expectations. The Shanghai Composite and the Shenzhen Composite gained 0.4% and 0.7%, respectively.

Stocks on Wall Street closed mostly in the red last Friday after Senate Republicans introduced their tax reform proposals. The Nikkei 225 and the Kospi lost 0.8% and 0.3%, respectively. Losses for materials stocks dragged down the S&P/ASX 200 by 0.3%. The Shanghai Composite and the Shenzhen Composite added 0.2% and 0.5%, respectively.

Pension Reform Concerns Drag Bovespa Lower

Encouraging earnings numbers boosted Chile’s stocks last Monday even as the Bovespa gained 0.5%. However, Brazil’s stocks dropped to their lowest level in two months last Tuesday. Concerns that the ongoing corruption investigation against President Temer would impede the government’s efforts to reduce spending led to the Bovespa closing 2.6% lower.

Brazil’s equity markets rebounded last Wednesday to emerge as the leading gainers among Latin American bourses following reassurances from the government that it would continue to make efforts to cut spending on social security. The Bovespa advanced 0.5% with Vale SA (NYSE:VALE) , Itau Unibanco Holding SA (NYSE:ITUB) and Petróleo Brasileiro SA (NYSE:PBR) contributing the most to the day’s gains.

However, the Bovespa declined more than 1.9% last Thursday following weak quarterly earnings results from key stocks. Brazil’s stocks suffered losses for the second successive day last Friday. Concerns about Temer’s ability to push through pension reforms led to the Bovespa losing 0.6%.

Stocks in the News

Toyota Motor Corporation’s (NYSE:TM) operating income rose 10% to ¥522 billion ($4.7 billion) in second-quarter fiscal 2018 (ended Sep 30, 2017). Consolidated revenues increased 7% year over year to ¥7.14 trillion ($64.36 billion) in the quarter. The top line surpassed the Zacks Consensus Estimate of $63.74 billion.

Zacks Rank #3 (Hold) Toyota reiterated its expectation for fiscal 2018 consolidated net revenues to be ¥28.5 trillion ($56.8 billion), reflecting a 0.4% decline over fiscal 2017. The operating income guidance is ¥2 trillion ($18 billion) compared with the previous guidance of ¥1.85 trillion ($16.82 billion) for 2018. (Read: Toyota's Q2 Operating Income Rises Y/Y, Revenues Top)

AstraZeneca plc (NYSE:AZN) reported third-quarter 2017 core earnings of 56 cents per American Depositary Share (ADS), which missed the Zacks Consensus Estimate of 57 cents. Total revenues rose 10% at CER to $6.23 billion in the reported quarter. Revenues also beat the Zacks Consensus Estimate of $5.75 billion.

While Zacks Rank #3 AstraZeneca retained its previously issued sales outlook for 2017, it slightly refined the core earnings guidance. AstraZeneca continues to expect total revenue to decline in the low-to-mid single-digit percentage range in 2017. However, core earnings in 2017 are expected toward the favorable end of the previously issued guidance of a decline in low-to-mid teen percentage. (Read: AstraZeneca Misses Q3 Earnings, Tweaks 2017 EPS View)

Adidas AG (DE:ADSGN) (OTC:ADDYY) came out with third-quarter 2017 results, wherein the company’s net income from continuing operations improved about 35% to €549 million (approximately $645.1 million). Adidas generated revenues of €5,677 million ($6,670.8 million) that advanced nearly 9% year over year. The Zacks Consensus Estimate was pegged at $7,074 million.

For 2017, management continues to envision net income from continuing operations to rise 26-28% to €1.360-€1.390 billion. The company reiterated its currency-neutral sales growth guidance in the range of 17-19% for 2017. The stock has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

GOL Linhas Aereas Inteligentes S.A.’s (NYSE:GOL) third-quarter earnings per share of $1.49 outpaced the Zacks Consensus Estimate of 47 cents aided by higher revenues. In the year-ago quarter, this Latin-American carrier had reported breakeven earnings. Net sales, comprising of cargo and passenger revenues, came in at $858.8 million (R$2.7 billion), surpassing the Zacks Consensus Estimate of $783.3 million.

Zacks Rank #3 GOL Linhas tweaked its forecast for 2017, earlier this year. The company now expects operating earnings before interest and taxes (EBIT) margin — a measure of the company's earnings ability — around 9% (previous guidance had projected the metric between 7% and 9%). (Read: GOL Linhas Beats on Q3 Earnings & Revenues, Stock Up)

Fresenius Medical Care AG & Co. KGAA (NYSE:FMS) reported adjusted earnings of 59 cents per American Depositary Share (ADS) in the third quarter of 2017, missing the Zacks Consensus Estimate of 61 cents. Earnings per ADS increased 9.3% on a year-over-year basis. In the last quarter, the company had missed the Zacks Consensus Estimate by 9.4%. Fresenius has a Zacks Rank #4 (Sell).

In the quarter under review, revenues increased 10.8% on a year-over-year basis to $5,093 million but missed the Zacks Consensus Estimate of $5,364 million. For 2017, Fresenius reiterated its guidance. The company estimates revenue growth of 8-10% at cc. Net income attributable to shareholders is likely to increase around 7-9%. (Read: Fresenius Medical Q3 Earnings Miss, FY17 View Intact)

Performance of Leading Foreign Stocks

The table given below shows the price movements of 10 of the largest stocks listed on indexes worldwide, over the last five days and during the last six months.

Next Week’s Outlook

With earnings season nearing an end, investors’ focus is likely to shift to political developments within Asia and Europe, as well as in the United States. Concerns surrounding the ability of Republicans to push through tax cut proposals will likely have an effect on this week’s market proceedings as well. Meanwhile, Brazil’s stocks remain weighed down by doubts over pension reforms, a trend which is likely to continue through this week as well.

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