By Jan Hromadko
FRANKFURT--Industrial conglomerate ThyssenKrupp AG (TKA.XE)
Friday reiterated its full-year guidance as third-quarter earnings
beat expectations though Germany's largest steelmaker by output
warned that the weak European economy remains challenging.
The company--whose products include steel, elevators, industrial
plants and naval vessels--said it expects adjusted earnings before
interest and taxes to amount to a "medium three-digit million euro
sum" in fiscal 2012, ending Sept. 30. even as incoming orders fell
over 21% in the three months to June.
"The weak economic situation and in particular the general
uncertainty resulting from the unresolved sovereign debt crisis [in
the euro-zone] are increasingly impacting our markets," said Chief
Executive Heinrich Hiesinger.
ThyssenKrupp has already responded to the challenging market
environment by introducing shorter working hours for some staff at
its European steel business as of the beginning of August,
Hiesinger said. The company has said it expects reduced working
hours to remain in place through the end of the year due to muted
demand, echoing comments made by other steel makers in recent
weeks.
Steel titan ArcelorMittal (MT) late last month said it wouldn't
rule out further temporary or permanent idling of European blast
furnaces as it realigns its production capacity to match poor
demand in the weak European economy. In total, ArcelorMittal has
already idled nine of its 25 blast furnaces in Europe.
ThyssenKrupp's net profit in the quarter ending June 30 was 212
million euros ($262.3 million), up from EUR109 million as gains on
a disposal and a robust capital goods business helped offset poor
pricing and demand in the European steel business. Excluding the
stainless-steel business Inoxum that will be sold to Finland's
Outokumpu Oyi (OUT1V.HE), profit was EUR238 million, up 16% from
EUR205 million in the same period a year earlier. The figure
considerably exceeded the net loss of EUR121 million that 13
analysts forecast on average in a Dow Jones Newswires poll, which
the company attributed to gains on the recent sale of its U.S. iron
casting business Waupaca.
ThyssenKrupp's closely-watched adjusted earnings before interest
and taxes from continued operations fell over 78% on the year to
EUR122 million, above forecasts, from EUR570 million a year
earlier. Third-quarter revenue from continuing operations was
EUR10.71 billion, down 6.9% from the EUR11.51 billion due to low
demand and prices for its steel products as well as asset
disposals. Analysts had forecast EUR10.86 billion.
ThyssenKrupp's shares Thursday closed at EUR15.65, valuing the
company at around EUR8.2 billion.
Write to Jan Hromadko at jan.hromadko@dowjones.com
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