Asia helps Deutsche Post beat first quarter expectations
FRANKFURT (Reuters) - Deutsche Post DHL (DPWGn.DE) was upbeat on the rest of the year after new contracts and demand for express delivery services in Asia helped beat expectations for sales and profit in the first quarter.
"There is still very healthy growth (in Asia) and we are profiting from that because we are still very strong in Asia in all DHL division," Chief Financial Officer Larry Rosen told journalists during a conference call on Tuesday.
Companies around the world are pinning their hopes for 2012 on resilient growth in Asia - where Deutsche Post generates about 14 percent of annual sales - as the United States struggles through a soft patch and Europe battles recession.
First-quarter earnings before interest and tax (EBIT) at Europe's biggest express delivery and mail company were up 9.9 percent at 691 million euros (558 million pounds), beating a consensus forecast of 656 million euros in a Reuters poll.
It said it still sees its 2012 EBIT improving to 2.5-2.6 billion euros from 2.44 billion last year, with an increase in sales, and affirmed its medium-term targets.
Analysts on average see Deutsche Post's 2012 EBIT edging up to 2.60 billion euros, followed by 2.81 billion in 2013.
Deutsche Post's strong results come after U.S. rival United Parcel Service (UPS.N) posted disappointing quarterly results and FedEx (FDX.N) lowered its outlook for the rest of the year due to tepid economic growth.
"Even in the face of an uncertain economic climate, particularly in western economies, we believe that the group will continue to experience good earnings momentum," Deutsche Post said, adding it saw the positive earnings trend continuing into 2013.
AUTOS, PHARMA HELP
Deutsche Post's earnings have held up thanks to demand for supply chain services from the automotive and pharmaceutical sectors, winning new business in countries such as Australia, Thailand, Indonesia and Japan.
It has also given up some less profitable business to boost margins, such as its domestic mail business in the United Kingdom and domestic express delivery in China.
Deutsche Post's quarterly revenue edged up 4.3 percent to 13.4 billion euros, while sales in the Asia-Pacific region were up by 12 percent.
Deutsche Post - whose main businesses are express delivery, supply chain, freight forwarding and letter mail services - said first-quarter net profit jumped by two thirds to 533 million euros, beating consensus of 519 million.
Shares of Deutsche Post have gained about 18 percent so far this year.
But it trades at 10.9 times estimates of 12-month forward earnings, at a discount to UPS's multiple of 15.3 and FedEx at 12.2, according to Thomson Reuters StarMine, which weights analyst estimates according to their accuracy.
(Reporting by Maria Sheahan; Editing by David Cowell)
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