Deutsche Post AG (DPW), Europe’s largest postal service, reported profit that beat analysts’ predictions because of growth at express-delivery businesses abroad, sending the stock to the highest in almost five years.
First-quarter net income fell 5.9 percent to 498 million euros ($648 million), the Bonn-based company said today in a statement. Profit exceeded the 441.6 million-euro average of five analyst estimates compiled by Bloomberg. Sales at the company’s DHL operations rose 13 percent in Latin America and 4.9 percent in the Asia-Pacific region.
Freight companies are struggling to maintain earnings amid recessions in Europe that have pushed unemployment in some countries to record highs. Robust economic growth in Asia means the region now generates more than half of DHL’s time-definite express shipments.
“The express division made significant investments into the expansion of its network in recent years,” Stephen Furlong, a Dublin-based analyst for J&E Davy Holdings, said in a note to clients. “The operational improvements are now producing the expected gains in profitability.”
Deutsche Post jumped as much as 4 percent to 19.58 euros, the highest intraday price since June 6, 2008, and was trading up 3.5 percent at 10:47 a.m. in Frankfurt. The shares have gained 17 percent this year in the third-best performance on the 22-stock Bloomberg Europe Transportation Index, valuing the company at 23.6 billion euros.
Earnings before income and taxes in the quarter rose 2.9 percent to 711 million euros as sales increased 0.6 percent to 13.4 billion euros. The company reiterated that Ebit will increase to as much as 2.95 billion euros this year from 2.67 billion euros in 2012. Last year’s net income was inflated by a 186-million-euro gain from the disposal of Deutsche Post’s banking activities.
“We’ve gotten off to a very solid start for the year in what is a very difficult macroeconomic environment,” Chief Financial Officer Larry Rosen said in an interview posted on Deutsche Post’s website.
Operating profit at the mail unit fell 2.6 percent as the quarter had fewer working days and a trade union staged short-term strikes. Sales at the unit benefited from a continuing boom in electronic commerce, with 11 percent more parcels shipped within Germany on average per day, Deutsche Post said.
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