German steel giant ThyssenKrupp AG (TYEKF.PK) reported Friday a decline in its third-quarter earnings mainly as the Steel Americas segment generated a wider loss and sales and orders were hurt by weak economy. Earnings and sales, however, beat analysts' estimates.
Looking ahead, ThyssenKrupp continues to expect to achieve adjusted EBIT in the mid three-digit million euro range for fiscal year 2012.
On Frankfurt's Xetra, ThyssenKrupp shares are currently trading at 16.38 euros, up 0.73 euros or 4.66 percent.
For the quarter, adjusted earnings before interest and tax or EBIT from continuing operations, a key earnings performance metric, plunged 79 percent to 122 billion euros.
Adjusted EBIT margin was 1.1 percent, compared to 5 percent in the prior year.
With the exception of Steel Americas, all business areas delivered positive contributions in the quarter. American regions was hurt by the difficult business environment with an unsatisfactory price level.
Third-quarter net income attributable to its stockholders fell 49 percent, while attributable profit from continuing operations climbed 16 percent to 141 million euros.
Heinrich Hiesinger, Executive Board Chairman said, "The weak economic situation and in particular the general uncertainty resulting from the unresolved sovereign debt crisis are increasingly impacting our markets. In this environment our capital goods businesses all delivered a pleasingly robust performance. Steel Europe and Materials Services also held up well and returned positive earnings contributions."
Quarterly net sales fell 7 percent to 10.71 billion euros from 11.51 billion euros a year earlier. Third-quarter order intake from continuing operations was 10.23 billion euros, 21 percent lower than the prior year.
In the nine months, adjusted EBIT plunged 73 percent as sales and orders fell 3 percent and 7 percent, respectively.
The company noted that significant growth in the elevator business and components business was not quite enough to offset the declines in the materials business as low volumes and prices resulted in weaker orders and sales. The weak economy is impacting the international steel markets.
Steel Europe's orders and sales were hurt by the disposal of Metal Forming business as well as a demand-related drop in shipments. Average selling prices improved slightly, against the market trend. Demand on the European flat carbon steel market remained subdued.
Steel Americas, with its steelmaking and processing plants in Brazil and the USA, generated higher sales with significant boost in USA's production and automotive markets.
Marine systems' sales nearly halved, while orders plunged from last year, as the prior year was benefited by a 2 billion euros order.
Looking ahead, the company warned that the global economy is showing signs of persistent weakness.
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by RTT Staff Writer
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