Deutsche Post Second-Quarter Profit Rises, Keeps 2007 Expectations
German mail and logistics group DeutschePost stuck to its full-year earnings goal despite a 10% rise in second-quarter operating profit, boosted by its DHL express delivery and logistics units.
Post said it continued to expect 2007 earnings before interest and tax (EBIT) excluding one-off items of at least 3.6 billion euros ($4.92 billion), up from 3.51 billion last year. Group 2006 EBIT including one-off items was 3.87 billion euros.
Finance chief Edgar Ernst had indicated earlier in the year that the forecast could be reviewed if business continued to develop as in the first quarter.
Second-quarter EBIT rose to 703 million euros, Deutsche Post said on Friday, beating the average forecast of 692 million euros from a Reuters poll of 14 analysts. Estimates had ranged from 662 million to 722 million.
"The logistics division continued its strong earnings growth and the express division made major progress," said Deutsche Post Chief Executive Klaus Zumwinkel in a statement.
Deutsche Post achieved a 6.5% rise in sales to 15.44 billion euros in the second quarter, boosted by its logistics unit and Deutsche Postbank. Net profit rose 13% to 285 million euros.
Deutsche to Increase Domestic Mail Business
Deutsche Post has been preparing for increased competition in its domestic mail business ahead of the full opening of the German market to competition in January.
This has included buying U.K. logistics firm Exel and expanding its DHL Express delivery business.
In the Americas, where DHL is trying to reach breakeven as it battles competition from dominant U.S. rivals UPS and FedEx , first-half sales rose 3.6% in local currency, driven by Latin America.
And higher income per shipment in the United States offset a drop in volumes resulting from the economy there, Post added.
Deutsche Post trades at some 11 times estimated 2008 earnings, making it cheaper than U.S. competitors UPS and FedEx, which trade at multiples of 16.5 and 13.5, according to Reuters data.