European Markets Edge Down After String of Earnings Announced

Results announcements include Anglo American, Lloyds, Adidas, Renault, Volkswagen.
By Mariko Iwasaki ,

European markets edged down after a string of earnings were announced in Europe and after the Federal Reserve decided to keep rates steady in the wake of the U.K.'s vote to leave the European Union in June.

The central bank did however hint that the economy was gaining strength and that a rate increase could be imminent. The Federal Open Market Committee said that improved hiring conditions and strong consumption have eased short-term economic worries. Investors are awaiting a monetary easing decision from the Bank of Japan overnight.

In London, the FTSE 100 fell 0.44% to 6,721.06, while in Paris CAC 40 edged down 0.59% to 4,420.58. In Frankfurt, the DAX fell 0.43% to 10,274.93.

Rolls Royce (RYCEY)  jumped 11.8% after it beat analyst's expectations reporting a slight profit in the first half. The engine maker's pre-tax profit fell 76% to £104 million ($115.5 million) in the first half of the year, underlying revenues fell 1.8% to £6.14 billion, ahead of forecasts of £6.12 billion. CEO Warren East said, "In the first half of 2016 Rolls-Royce performed broadly in line with expectations, delivering a result a little better than breakeven; and the outlook for the rest of the year remains unchanged."

Anglo American (NGLOY)  rose 5% after said it was on track to reduce debt by £10 billion by the end of the year. Debt currently sits at £11.7 billion. The miner narrowed its loss in the first half.

Shell (RDS.A) dropped 2.9% after second-quarter results were worse than expected due to low oil prices.

British American Tobacco (BTI) - Get Report edged up 0.61% after announcing better-than-expected first-half results. Earnings per share were up by 10.9% for the period, to 111.1 pence, against expectations for 9% growth to 109.8 pence. Growth at constant exchange rates was higher, at 13.4%. This was after revenues rose by 4.2%, to £6.6 billion and by 7.8% at constant exchange rates.

Lloyds (LYG) - Get Report  dropped 5.2% after the bank said first-half dividend would be less than consensus expectations. They also warned that uncertainty surrounding the U.K.'s Brexit vote will result in lower capital generation.

Dialog Semiconductor (DLGNF) fell 3.1% after the Apple (AAPL) - Get Report supplier revised down its revenue outlook for 2016 due to weakening demand from the smartphone market. The company, which in May said it expects revenue to drop by a high-single digit percentage, said it now expects a 15% year-on-year decline  (Apple is held in Jim Cramer's charitable trust Action Alerts PLUS. See all of his holdings here).

Adidas (ADDYY)  rose 2.5% in Frankfurt, after the apparel company announced its best ever first quarter. The sportswear group saw revenues rise 17% compared with the same time period last year. Full year group sales were expected to increase 15%.

Renault (RNSDF) shares dropped 4.3% despite reporting a record first-half operating margin and confirming its full-year guidance for increased revenue, improved operating margin and positive operational free cash flow for its automotive unit. One blemish on the result was the drop in "contribution" from associated companies, mainly Japan's Nissan Motor (NSANF) , (NSANY)  and Russia's Avtovaz.

Volkswagen (VLKAY) (VLKAF) , (VLKPY) , (VLKPF) shares fell 3.1%. The German car maker today projected that full-year sales may be down as much as 5% compared with last year. In the first half of the year, operating profits before special items was €7.5 billion up from €7 billion last year. However, the company has set aside €2.2 billion for legal costs associated with its emissions testing scandal.

West Texas Intermediate recently fell 1.9% to $41.13, while Brent Crude recently dropped 1.96 %to $42.62 per barrel.

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