Henkel Q3 net income rises 70 percent

FRANKFURT - German consumer goods company Henkel AG said Wednesday its third quarter net income rose 70 percent due to effects including charges in the year-ago period, but sales fell at some divisions as the downturn affected demand.

The maker of Persil laundry detergent and Dial soap said net income rose 70 percent to euro172 million ($257.42 million) from euro101 million in 2008.

Revenue for the third quarter fell 7 percent to euro3.5 billion from euro3.8 billion in the third quarter a year ago, led by order declines from large customers in its adhesives division.

Henkel, based in Duesseldorf, said it expects the consumer business to perform well in the fourth quarter, while the adhesives division — which includes brands like Pattex and Loctite — will improve compared to the first nine months of the year.

The company said that despite the recent stabilization of markets, it remained difficult to assess the overall economic situation and how it's likely to develop.

Henkel said, however, that declines in raw material costs would help earnings.

"The encouraging results registered in this last quarter reflect both the stabilization in our markets and our programs on structural and cost alignment," Kasper Rorsted, the company's chief executive, said in the report.

"We achieved excellent results at laundry and home care, and our cosmetics and toiletries business sector was also able to once again exceed the very good performance of the previous quarters. There was also a further improvement in the results of the adhesive technologies business sector in the course of the year," Rorsted said.

The laundry and home care division saw revenue decrease nearly 3 percent to euro1 billion, while earnings before interest and taxes — a measure of operating profit — increased 17 percent to euro137 million.

Cosmetics and toiletries revenue were nearly unchanged at euro764 million, with operating profit up 3 percent at euro99 million.

The adhesive division's revenue fell 12 percent to euro1.6 billion while operating profit was euro89 million, a 47 percent drop from the third quarter of 2008.

Shares of Henkel were down a quarter of a percent at euro27.59 in Frankfurt afternoon trading.

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