European Finance Chiefs Prepare for Slowing Growth, Trade Uncertainty

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Investor expectations were aloft following augmenting expansion in Europe during progressing buliding this year, adding to a vigour on companies to urge their results. “It is harder to kick expectations when we come from a aloft base,” pronounced Emmanuel Cau, conduct of European equity plan at

Barclays

PLC.

Decreased mercantile activity in Europe and China, Britain’s 2019 exit from a European Union and a impact of trade tensions between a U.S. and China also cloud a horizon. And companies have warned about a mercantile impact of these factors on their businesses.

“The hurdles in a macroeconomic sourroundings are growing,” BASF SE Chief Executive Martin Brudermüller pronounced on Oct. 26, when a association expelled a earnings, according to a press release.

Net income during a German chemicals association in a third entertain declined 10% year-over-year to €1.2 billion ($1.36 billion), while gain before interest, taxation and special equipment forsaken 14% to €1.5 billion, compared with third entertain in 2017. Earnings per share fell 10% in a third entertain to €1.31, down from €1.45 reported in a before year quarter. Analysts had foresee gain per share of €1.36.

Car maker

Volkswagen
AG

reported a arise in third-quarter sales and distinction though also highlighted a changes in mercantile sentiment. “If we review a tellurian mercantile horizon condition, from currently to 12 months ago, life positively seems to have got even some-more challenging,” Chief Financial Officer Frank Witter pronounced during a company’s Oct. 30 gain call, according to FactSet.

The dump in view comes after several buliding of clever gain posted by companies in a Stoxx Europe 600.

But in a third quarter, a eurozone’s sum domestic product grew by 0.2% in a 3 months finished Sept. 30, down from 0.4% available during a 3 months to Jun 30, according to a EU’s statistics agency. In 2017, GDP grew by 2.5%, a fastest expansion rate given 2007.

Executives are holding several measures to ready their companies for a intensity duration of uncertainty. “Companies are rethinking their supply bondage and their prolongation lines,” pronounced Mislav Matejka, tellurian equity strategist at

JP Morgan Chase
Co.

Some executives, generally in a automobile industry, are focusing on their cost base, while others are augmenting prices to recompense for aloft tender materials costs.

Compagnie de Saint-Gobain SA, a French building-materials maker, lifted prices for a products by 3.5% year-over-year in a 3 months by September, compared with a 3% boost in a second entertain and 2.1% in a initial quarter, according to Chief Financial Officer Guillaume Texier. “We are pulling prices in all geographies, a small bit everywhere,” he pronounced in an interview.

Dutch company

Akzo Nobel

NV lifted prices for a coatings by 7% in a third quarter, compared with a 5% boost in a second quarter. Prices for a paint products on normal rose by 5% in a third quarter, adult from 4% in a second quarter.

“We continue to pull by cost increases,” Maarten de Vries, a company’s financial arch said. The paint-maker reported a 4% dump in income to €2.3 billion for a third quarter, compared with €2.4 billion in a before year-ago period.

“European corporates still have a ability to boost prices,” pronounced Barclays’ Mr. Cau, a pointer that a underlying economics are still rather healthy. Around 85% of companies in a Stoxx Europe 600 have possibly confirmed or lifted their full year guidance, according to Mr. Cau.

Write to Nina Trentmann during Nina.Trentmann@wsj.com

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