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UPDATE 3-Cemex posts wider-than-expected Q3 loss; U.S. sales rise

Elinor Comlay and Gabriela Lopez
Thursday, 24 Oct 2013 | 11:56 AM ET

MEXICO CITY/MONTERREY, Oct 24 (Reuters) - Mexico's Cemex, one of the world's biggest cement companies, reported a wider-than-expected quarterly loss on Thursday as taxes increased, but sales picked up, especially in the United States, sparking a nearly 4 percent jump in its shares.

The company , which has struggled amid the global economic downturn and a heavy debt load from costly acquisitions, said U.S. cement sales rose 8 percent, and were also higher in Europe, Asia and most of Latin America.

Cemex shares rose nearly 4 percent to 14.23 pesos in local trading and jumped 3.6 percent in U.S. trading.

Slower spending by the Mexican government on infrastructure projects put a slight damper on the results, with Cemex reporting a double-digit drop in sales.

Still, the company said Mexico was starting to pick up.

"It will improve, it has already started improving and we expect it will continue to improve in 2014," Fernando Gonzalez, executive vice president of finance and administration, said on a call with analysts.

Todd Vencil, an analyst at Sterne Agee, said the company missed his expectations due to a drop in Mexican sales.

"But given the recent pullback in the stock, we suspect that (the miss) was priced in," he said in an early report.

Through Wednesday's close, Cemex shares had fallen almost 10 percent since the end of August.

MISSED EXPECTATIONS

Cemex posted a third-quarter loss of $155 million, compared with the average analyst estimate of a loss of $22 million, according to a Reuters survey.

The Monterrey-based company lost $203 million in the year-earlier third quarter.

Cemex's income tax payment increased by 12 percent from a year earlier, but executives told analysts on the call they expected tax payments for this year to be only slightly higher than the previous year.

Net sales rose 3 percent to $4.02 billion, while analysts expected $4.05 billion.

The residential sector drove the higher U.S. sales, Cemex said, adding it was "sustained by strong fundamentals such as high affordability, large pent-up demand and low levels of inventories."

Sales in Northern Europe, dampened in recent quarters by sluggish economic growth, rose 6 percent, while results in Southern Europe, Asia and the rest of Latin America were also higher.

Operating core profit, or earnings before interest, taxes, depreciation and amortization, increased 2 percent to $747 million from $735 million a year earlier.