Germany’s ThyssenKrupp says 1st quarter profit dipped 2 percent but still beat forecasts

ThyssenKrupp Q1 profit dips, beats expectations

FRANKFURT — German steelmaker ThyssenKrupp AG said Friday that net profit in the September-December period dipped 2.4 percent from a year earlier, as a drop in sales prices offset a rise in shipped volumes, but forecast that demand would continue to improve this year.

The company, based in Duesseldorf, earned €164 million (nearly $225 million) in its fiscal first quarter compared with €168 million a year earlier.

Despite the drop, the figure beat analysts’ estimates and it was the first time that the company was in the black since the end of December 2008, having faced restructuring charges and the effects of the global economic downturn on the steel industry.

Revenue fell 19 percent to nearly €9.4 billion compared with €11.5 billion in the final three months of 2008 though the company said that demand by car makers was better than expected and higher shipping volumes offset lower steel prices.

Investors were buoyed by the better-than-expected results, sending ThyssenKrupp shares up 3.5 percent before they fell back to €22.55, or up nearly 1 percent.

Looking ahead, ThyssenKrupp said it expected growth to be about 1.5 percent through 2010, and noted that while the prospects for the global steel market “remained subdued,” demand would be better than 2009 in Europe, North American and Japan as companies restock.

“As we regard the emerging economic recovery as still fragile, we remain cautious,” Chief Executive Ekkehard Schulz said in the report. “We therefore continue to forecast adjusted earnings before taxes in the low three-digit million euro range.”

The company said construction work on its plant in Alabama was going forward with the expectation that it would go online later in 2010.

“We are continuing construction of the hot- and cold-rolling mills and the picking line largely to schedule,” the company said.

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