October 18, 2018 / 11:51 AM / a year ago

UPDATE 2-Profit warning sends HeidelbergCement shares tumbling 10 pct

* Trims operating profit guidance

* Says sales volume and revenue on track for full year

* Shares drop as much as 10.3 percent (Recasts, adds details on U.S. business, shares, analyst)

By Tom Sims and Christoph Steitz

FRANKFURT, Oct 18 (Reuters) - HeidelbergCement, the world’s second-largest cement maker, trimmed its profit guidance for 2018 on Thursday, sending its shares down as much as 10 percent to a near four-year low.

The group blamed higher-than expected energy costs and persistent bad weather in the United States for cutting its outlook, as North America accounts for more than a third of the group’s core earnings.

It said it now expects core earnings, or the result from current operations before depreciation (RCOBD), to rise by a low to medium single-digit percentage this year, adjusted for currency effects, compared with a previous forecast for a medium to high single-digit percentage rise.

In 2017, the group’s RCOBD rose 14 percent to 3.3 billion euros ($3.8 billion).

Shares in HeidelbergCement, which is due to publish third-quarter results on Nov. 8, fell as much as 10.3 percent on the news to their lowest level since January 2015. They were still down 8.8 percent at 1143 GMT.

“Investors should not forget that the strong rise in energy costs is usually a temporary effect as most of it will be compensated by price increases,” Bankhaus Lampe analyst Marc Gabriel said in a note, keeping a “buy” rating on the stock.

“However, the quick rise has only partially be compensated by price increases in the course of this year and we expect further price increases to cover most of those effects in the upcoming months.”

HeidelbergCement’s profit warning hit shares in bigger European rival LafargeHolcim, which also depends on North America for most of its recurring core earnings.

LafargeHolcim shares fell as much as 4.7 percent to their lowest level in more than two years. The group is scheduled to release third-quarter results on Oct. 26.

HeidelbergCement did, however, maintain its guidance for 2018 sales volumes and revenue, saying they had met targets in the first nine months of this year.

It also said it now expects the ratio of net debt to RCOBD to be higher by the end of the year than the previously expected 2.5.

$1 = 0.8681 euros Editing by Thomas Seythal and Susan Fenton

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