Flat week for US, European markets

MARKET OUTLOOK

- US: US markets ended flat last week after a slight bounce due to a batch of good earnings reports, with the Dow and the S&P reaching new record highs. Shares from telecom services, real estate and automobile were among the best performers, while the sectors of transportation, media, retailing, consumer services and pharma and bio lost more than 2% ground. Technically, the coming week is likely to remain corrective and some strong support areas should be tested.

- EUROPE: After a little rebound, European markets closed flat as all indexes fell last Friday. Only stocks from basic resources were really positively oriented, while shares from travel and leisure, health care, insurance, chemicals and media dropped more than 2%. Technically, the outlook remains corrective, but limited, for this week.

COMPANY PREVIEW

Procter and Gamble (USD 64.86 ; -1.86% ; PG ; PG.N)

Procter and Gamble publishes its results on Tuesday. The market sees 2Q/Dec EPS of $0.83 ($0.72 a year ago) on a revenue of $19.57bln ($18.34bln). Last week, the group acquired HDS Cosmetics Lab from private equity firm North Castle Partners to expand its skin-care offerings. Terms of the transaction were not disclosed.

Altria (USD 88 ; 0.85% ; MO ; MO.N)

On Wednesday, Altria Group delivers its quarterly earnings. The market expects 4Q/Dec EPS of $1.23 ($1.17 a year ago) on a revenue of $18.23bln ($17.83bln). Barron's said on Saturday that the group may announce this week it plans to distribute its $50bln stake in Kraft to shareholders. Kraft shares may be valued at appx. $25 each.

Exxon Mobil (USD 73.61 ; 0.11% ; XOM ; XOM.N)

Thursday, Exxon Mobil is scheduled to announce 4Q results. The group may report EPS of $1.51 ($1.65 a year ago). Exxon Mobil and BP are among companies that may bid for oil exploration offshore Cyprus - the Cyprus Weekly 26/01/07. In other news, ConocoPhillips posted last week its first profit decline in four years on gasoline and natural gas prices drop. 4Q EPS fell to $1.91 from $2.61 a year earlier.

Astrazeneca (GBp 2804 ; -2.98% ; AZN ; AZN.L)

The same day, Astrazeneca will report FY and 4Q results pre-market. Last year, FY net income reached $4.71bln and sales of $23.95bln, while 4Q net income reached $1.224bln and sales $6.29bln. On January 25, the group announced that it is expanding a cost-saving project at a Swedish plant to other sites after the programme helped lift profits. The company said techniques inspired by car and truck makers helped reduce by 60% the time it takes to make a drug and lowered per pill manufacturing costs by 5% a year.

Ericsson (B) (SEK 28.6 ; 0.18% ; ERICB ; ERICb.ST)

Finally, Ericsson is expected to deliver on Friday its 4Q and FY results. Last year, 4Q net income reached SK8.541bln and sales SK46.66bln, while FY sales reached SK24.31bln and sales SK151.82bln. On January 25, the group announced the completion of the merger of its indirect wholly-owned subsidiary, Maxwell Acquisition Corporation, with and into Redback Networks, with Redback surviving the merger as a wholly-owned subsidiary of Ericsson. The merger follows the successful completion of the tender offer by Ericsson for all of the shares of Redback for the price of $25 per share.