BRUSSELS, May 11 (Reuters) – Belgian-French financial group Dexia’s (DEXI.BR: Quote, Profile, Research, Stock Buzz) banking operations performed better than expected in the first quarter but the overall result was undone by a loss from the sale of bonds and toxic assets.

Dexia, partly state-owned and which received a 6 billion euro ($8.4 billion) bailout from shareholders in 2008, said net profit fell 68 percent to 69 million euros, compared with a forecast for 92.4 million in a Reuters poll.

Dexia is obliged by the European Commission to divest activities and reduce its balance sheet and said the pretax profit of businesses it planned to keep doubled.

Petercam analyst Matthias De Wit upgraded the stock to “hold” from “reduce” after the results, saying: “The core divisions, the parts that will be the future Dexia, are performing better than expected.”

He told Reuters that expectations had been very low after Dexia said in its full-year report that 2011 would be a tough year.

Shares of Dexia rose as much as 5 percent in early Wednesday trading, though they have lost roughly a quarter of their value since reaching highs in February, just before the 2010 results.

Dexia performed better than expected in retail banking, where it is mainly active in Belgium and Turkey, and its asset management business. It was in line with expectations in its public financing arm.

BRUSSELS (Reuters) – ArcelorMittal (ISPA.AS: Quote, Profile, Research, Stock Buzz), the world’s largest steelmaker, forecast strong prices and shipments that would propel earnings to a post-crisis high in the second quarter following a sharp rebound at the start of the year.

The group, which makes 6 to 7 percent of global steel, reported first-quarter earnings above expectations, after steel prices caught up with a spike in iron ore and coking coal costs and demand steadily grew from the auto and engineering sectors.

The Luxembourg-based company said core profit should be between $3 billion and $3.5 billion in the second quarter, the highest level since third quarter of 2008, just before the global steel sector went into freefall.

“As anticipated, we have seen a stronger start to the year, with an increase in both shipments and selling prices,” Chief Executive Lakshmi Mittal said in a statement.

“This is expected to further improve in the second quarter as the underlying demand recovery continues. We remain confident that 2011 will be a stronger year than 2010.”

ArcelorMittal said its blast furnaces would be running at 80 percent of capacity in the second quarter, up from 75 percent in the first three months.

Core profit (EBITDA) in the first quarter was $2.58 billion, higher than the $2.40 billion average forecast in a Reuters poll of 17 banks and brokers.

BRUSSELS, May 10 (Reuters) – Stainless steel maker Aperam (APAM.AS: Quote, Profile, Research, Stock Buzz) reported a higher than expected profit in the first three months of the year but warned that margins were coming under pressure from a mix of factors in the second quarter. The company, spun off by ArcelorMittal (ISPA.AS: Quote, Profile, Research, Stock Buzz) and separately listed at the start of the year, said a recent decline in nickel prices, economic uncertainty and the weak dollar would pressure margins in the April-June period.

Chief Executive Bernard Fontana said the lower price of nickel, used in 60 percent of Aperam’s stainless steel, had prompted a “wait-and-see” attitude among would-be buyers.

London Metal Exchange three-month nickel prices have come off some 14 percent since early March.

“We want to be a bit cautious. Will it be sustained or just some days of correction,” he told Reuters by telephone.

If sustained, group shipments and the core profit of its sales and distribution arm could be lower in the second quarter than the first.

Prices would also be under pressure throughout the year due to overcapacity, Fontana said.

Aperam’s outlook mirrors that given by Finland’s Outokumpu (OUT1V.HE: Quote, Profile, Research, Stock Buzz) last month. [ID:nLDE73J06R]

BRUSSELS, May 6 (Reuters) – European steelmakers were seen expanding squeezed margins at the start of 2011 as prices caught up with a spike in iron ore and coal costs and demand improved, particularly from the auto and engineering sectors.

ArcelorMittal (ISPA.AS: Quote, Profile, Research, Stock Buzz), the world’s largest steelmaker, kicks off sector earnings for the region next Wednesday, having already said core profit (EBITDA) for the January-March period would rebound from a very weak level at the end of 2010.

Investors will also be looking to Germany’s ThyssenKrupp (TKAG.DE: Quote, Profile, Research, Stock Buzz), hoping for more details on its restructuring when it reports results for its second quarter at the end of next week.

The steelmaker on Thursday unveiled a plan for up to 10 billion euros ($14.5 billion) in divestments and the possible spin-off of its stainless steel business, Europe’s biggest, lifting its shares as much as 8 percent [ID:nLDE74509I].

Aperam (APAM.AS: Quote, Profile, Research, Stock Buzz), the stainless steel business spun off by Arcelor earlier this year, is expected to report a first-quarter core profit more than five times higher than the previous quarter, according to a Reuters survey. [ID:nLDE71K0R6]

ArcelorMittal, which makes 6 to 7 percent of the world’s steel and whose production is more than double its nearest rival, typically gives a profit outlook for the quarter ahead, the most keenly watched number for investors.

A Reuters poll showed analysts expect the second quarter to show a 35 percent improvement from the first, when the company is expected to report a 29 percent rise from the final three months of 2010. [ID:nLDE7450SW]

BRUSSELS, May 4 (Reuters) – Anheuser-Busch InBev (ABI.BR: Quote, Profile, Research, Stock Buzz), the world’s largest brewer, increased revenue and profit in the first quarter as price hikes more than offset lower volumes caused by U.S. unemployment and flooding in Brazil.

The company, whose key international brands are Budweiser, Stella Artois and Beck’s, said on Wednesday high unemployment among young males in the United States reduced volumes while heavy rain in Brazil kept growth to a minimum.

However, beer revenues in its two largest markets rose because of price increases.

Overall group shipments fell 0.4 percent on a like-for-like basis, but revenues rose 5.6 percent to $9.0 billion and core profit (EBITDA) by 6.5 percent to $3.41 billion. Both were in line with forecasts in a Reuters poll. [ID:nLDE73R1DK]

Volumes increased in other regions, most markedly in eastern Europe which rebounded from a very weak first quarter in 2010 when beer tax in Russia tripled.

AB InBev repeated that the cost of sales per hectolitre should increase by a low single-digit percentage this year as its hedging mitigated the impact of global commodity costs.

The futures price for malt barley EOBc1 is more than 50 percent higher than a year ago.

BRUSSELS (Reuters) – Europe’s economy is starting to feel the drag of rising inflation and interest rates but the effect so far is minor and the full impact will be felt around the end of this year, analysis of past business cycles suggests.

Inflation in the euro zone climbed in March to 2.7 percent year-on-year, its highest level since late 2008. The European Central Bank aims for levels of below but close to 2 percent, and inflation has been above that figure since December.

That is hitting consumers and businesses in two ways: by curbing their real, inflation-adjusted income, and by prompting the ECB to hike interest rates. The central bank raised its main rate by 0.25 percentage point this month, to 1.25 percent, and markets expect two more similar hikes this year.

“On a simplistic level for consumers, either you don’t buy the television or you reduce savings” in response to inflation, said Carsten Brzeski, senior economist at ING, adding that there was little sign of consumers choosing the latter approach.

Euro zone consumer confidence dropped to its lowest level this year in April. Retail sales fell month-on-month in February and only inched up in annual terms. They even declined, unexpectedly, in Europe’s largest and strongest economy, Germany.

Nevertheless, Purchasing Managers Indexes for the euro zone in April stayed well above the boom-or-bust mark of 50, in line with expectations that moderate economic growth will continue for the rest of 2011. A Reuters poll of analysts in mid-April predicted gross domestic product growth of 1.7 percent for the year.

“For the time being, the impact of higher inflation on growth is quite muted, although we have seen consumer confidence declining which could depress growth,” said ING chief economist Peter Vanden Houte.

BRUSSELS (Reuters) – Europe’s economy is starting to feel the drag of rising inflation and interest rates but the effect so far is minor and the full impact will be felt around the end of this year, analysis of past business cycles suggests.

Inflation in the euro zone climbed in March to 2.7 percent year-on-year, its highest level since late 2008. The European Central Bank aims for levels of below but close to 2 percent, and inflation has been above that figure since December.

That is hitting consumers and businesses in two ways: by curbing their real, inflation-adjusted income, and by prompting the ECB to hike interest rates. The central bank raised its main rate by 0.25 percentage point this month, to 1.25 percent, and markets expect two more similar hikes this year.

“On a simplistic level for consumers, either you don’t buy the television or you reduce savings” in response to inflation, said Carsten Brzeski, senior economist at ING, adding that there was little sign of consumers choosing the latter approach.

Euro zone consumer confidence dropped to its lowest level this year in April. Retail sales fell month-on-month in February and only inched up in annual terms. They even declined, unexpectedly, in Europe’s largest and strongest economy, Germany.

Nevertheless, Purchasing Managers Indexes for the euro zone in April stayed well above the boom-or-bust mark of 50, in line with expectations that moderate economic growth will continue for the rest of 2011. A Reuters poll of analysts in mid-April predicted gross domestic product growth of 1.7 percent for the year.

“For the time being, the impact of higher inflation on growth is quite muted, although we have seen consumer confidence declining which could depress growth,” said ING chief economist Peter Vanden Houte.

BRUSSELS, April 20 (Reuters) – Heineken NV (HEIN.AS: Quote, Profile, Research, Stock Buzz), the world’s third-largest brewer, increased beer sales in all regions of the world in the first quarter, but it warned that its strong earnings would not be replicated throughout the year.

Heineken, whose chief brands are Heineken itself and Amstel, Europe’s number one and three beers by sales, reported consolidated volumes on Wednesday that were higher than expectations and the first annual increase since the end of 2008.

Growth was strongest in Africa and the Middle East despite unrest in Egypt, but beer sales also rose in the mature and flat western Europe market, due to more drinking in Britain, France and the Netherlands.

Beer consumption also rebounded in Russia from a year ago, when a tripling of excise duty on beer struck.

The Dutch brewer repeated its forecast of a low single-digit increase in input costs per hectolitre.

It also said that higher planned marketing spending this year was likely to impact profits, notably in Europe, still the dominant part of Heineken’s business. Almost half of the Dutch brewer’s revenue last year came from western Europe.

The growth of volumes and drive to reduce costs resulted in a like-for-like rise of operating profit before one-offs of more than 20 percent in the first quarter.

BRUSSELS (Reuters) – Industrial output in the euro zone accelerated by less than expected in February as manufacturing picked up in Germany and resumed growth in other bloc members but fell in bailout recipients Greece and Ireland.

Production in the 17 countries using the euro rose by 0.4 percent from January, the European Union’s statistics office Eurostat said on Wednesday, below the 0.7 percent average forecast in a Reuters poll of 38 economists.

The figures showed the fifth consecutive monthly rise for the euro zone. On an annual basis, output in February rose 7.3 percent, but below the 7.8 percent expected.

Analysts said the figures were disappointing and see production slowing later in the year.

The January figures were revised down, to show a gain of 0.2 percent month-on-month from a previous 0.3 percent rise and to an annual rise of 6.3 percent from 6.6 percent, suggesting a more modest pickup from a cold snap at the end of 2010.

Economists said the disappointing February data possibly reflected oil prices, which rose some 10 percent during the month, but said the recovery remained on track.

“I would expect a further increase in March and, all in all, an acceleration in economic growth in the first quarter,” said Martin van Vliet at ING in Amsterdam.