ANDR Andrea Electronics Corporation (CE)

Austrian high-technology machinery maker Andritz AG (ANDR.VI) Friday reported cost cutting helped it to post an 8.5% rise in fourth-quarter net profit, reversing three consecutive quarters of declines, and said savings and restructuring measures will propel earnings higher in 2010.

Andritz said it expects sales this year to be flat or slightly above the level achieved in 2009, while the cost cuts and restructuring implemented last year should help generate increased profit.

Chief Executive Wolfgang Leitner told reporters he is sticking to the previously announced target of a margin on earnings before interest, tax and amortization, or Ebita, of 7% in 2010, up from 6% in 2009.

"It's a very ambitious target, but I still believe we can reach it," he said. Leitner added he expects growth in 2010 to come from the hydropower projects business, but he sees no substantial increase in investment activity in pulp and paper and metals, Andritz's two other major business areas.

Andritz said its 2009 order intake fell 9.6% year-on-year to EUR3.35 billion, but its order backlog at the end of the year was up 3.7% at EUR4.43 billion.

Leitner said Andritz continued to seek suitable acquisitions and currently is assessing a number of potential targets, but he declined to provide details.

Andritz's fourth-quarter net profit rose to EUR37.2 million from EUR34.3 million in the same period a year earlier as the impact of a leaner cost structure trickled down to the bottom line. Sales dropped 19% to EUR867.3 million.

Andritz's full-year net profit fell 31% to EUR96.8 million from EUR139.7 million in 2008 as sales fell 11% year-on-year to EUR3.2 billion and restructuring expenses of EUR29 million weighed on the bottom line.

The company said it intends to propose a 2009 dividend payment of EUR1 a share, down from EUR1.10 in 2008. The payout represents 53% of net profit compared with 40% a year earlier.

UniCredit MIB analyst Harald Weghofer in a note said the results were roughly in line with consensus and called the outlook and guidance "encouraging." He maintains a buy recommendation on the shares with a price target of EUR49.

At 1143 GMT, Andritz's shares traded down EUR0.27, or 0.7%, at EUR41.44, in an overall Vienna ATX 20 index that traded up 0.9%.

-By Flemming E. Hansen, Dow Jones Newswires; +43 1 513 69 22 10; flemming.hansen@dowjones.com

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