(Updates with analyst’s comment in third paragraph.)
Oct. 31 (Bloomberg) -- TNT Express NV, Europe’s second- largest express-delivery service, posted an unexpected third- quarter profit after raising prices in Europe and Asia. The stock rose the most since the company was set up in May.
Net income totaled 5 million euros ($7 million) compared with 14 million euros a year earlier, the Hoofddorp, Netherlands-based company said in a statement. Analysts were predicting a loss of 5.9 million euros, according to the average of four estimates compiled by Bloomberg. Revenue climbed 1.3 percent to 1.78 billion euros.
“There has been some slowing, but less than I was going for,” said Andre Mulder, an Amsterdam-based analyst at Kepler Capital Markets with a “hold” recommendation on TNT Express. Growth has been sustained, and “people might have been expecting that in a sensitive activity like express it might have fallen off a cliff, but it’s not that way in any area.”
The company, which was spun off from Dutch national mail- carrier Post NL at the end of May, cut its 2011 earnings target earlier this month, citing weak Asia-Europe demand. The full- year underlying operating-profit margin, which excludes one-time effects and currency shifts, will amount to 8 percent to 9 percent of sales, TNT Express reiterated today. The earlier target was a margin exceeding 9 percent.
‘We Are Prepared’
“Should we see the stark, high single-digit volume declines we saw in 2008, then we are prepared for that,” Chief Financial Officer Bernard Bot said in a conference call with journalists. TNT Express is preparing for “scenarios which show low growth and scenarios which are zero or even worse, so we can react very quickly,” and it’s already introducing cost-cutting measures.
TNT Express jumped as much as 8.3 percent to 6.37 euros, the biggest intraday gain the stock began trading separately from Post NL on May 26, and was up 7.1 percent as of 12:22 p.m. in Amsterdam. That valued the company at 3.42 billion euros.
Revenue per consignment in Europe, the Middle East and Africa increased 1.2 percent to 25.30 euros, the company said. The figure jumped 11 percent to 38.60 euros in the Asia-Pacific region.
About 20 million euros in annualized savings will be achieved in 2011 in the first phase of a planned 50 million euros of indirect cost savings, TNT Express said.
One aircraft from the company’s five-plane fleet in the Asia-Pacific region has already been subleased, and TNT Express is looking to reduce capacity by “another one or two” planes, Bot said.
--Editors: Tom Lavell, Thomas Mulier
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