Postal company TNT posts 16% drop in Q2 profit
The Dutch-based postal company said second quarter earnings fell 16 percent from the same period a year ago as costs increase.29 July 2008
AMSTERDAM - TNT NV, the Dutch-based postal company, said Monday that second-quarter earnings fell 16 percent from the same period a year ago, as fuel, labour and financing costs increased.
Net profit was EUR 205 million, down from EUR 244 million, while sales rose 4.5 percent to EUR 2.81 billion.
The company's chief executive warned of a slowdown in European express mail volumes in June, as customers shifted from sending packages by air mail to slightly cheaper but slower road traffic.
"The sharp rise in fuel prices during the quarter and the general economic outlook have impacted both our customers and us," Peter Bakker said in a statement.
Express mail operating profit still grew 5.1 percent to EUR 153 million due to strength in emerging markets.
The company's regular mail operations continued a long-term sales decline in the Netherlands, balanced by growth in other markets. Operating profits slid 3.8 percent to EUR 173 million.
Shares fell 9.3 percent to EUR 21.75 in Amsterdam on Monday, following a 10 percent rise on Friday.
The company did not address reports in the Wall Street Journal that TNT had entered and then ended merger talks with Federal Express, which caused its stock price to gyrate wildly this month.
"TNT's Q2 performance heavily disappoints us, certainly after the continuous positive statements made at its last analyst meeting in late June," analyst Thijs Berkelder wrote in a note on the earnings.
He said he did not believe assertions by the company that it would meet its financial targets of "high single digit" sales growth at its express division and "low single digit" sales growth at its mail division.
TNT said Monday it would meet those targets "albeit at (the) low end" of those ranges.
Berkelder predicted takeover rumours would gather strength if the company's stock falls below EUR 20.
[AP / Expatica]