Bekaert NV, the world’s largest maker of steel cord for tires, rose the most in almost four years in Brussels trading after reporting first-quarter sales that beat some analyst estimates.
The shares climbed as much as 15 percent on Euronext Brussels, the biggest intraday increase since August 2008, and traded 2.33 euros higher at 23.86 euros by 12:03 p.m. local time, trimming the retreat so far this year to 3.7 percent.
Sales in the three months through March fell 2.6 percent to 895 million euros ($1.16 billion), Zwevegem, Belgium-based Bekaert said today in a statement. That beat the 820.5 million-euro average of two analyst estimates compiled by Bloomberg. Sales rebounded from the prior quarter in all regions and countries except China, where most of the sawing-wire capacity is based.
“This is significantly above the very weak performance” of the fourth quarter, Bernard Hanssens, an analyst at Bank Degroof in Brussels who has a hold rating on the stock, said in an investor note. Hanssens had estimated first-quarter sales of 807 million euros. “This trading update provides some relief.”
Excluding the effect of acquisitions, disposals and currency movements, revenue fell 14 percent in the first quarter because of a collapse in sawing-wire prices last year, which followed a 13 percent drop in the preceding three-month period.
“The underlying sales trend is stabilizing, but not improving,” Emmanuel Carlier, an analyst at ING Groep NV in Brussels who recommends selling the shares, wrote in a note today. “The biggest risk is that part of the sawing-wire capacity will be converted into tire cord at a moment that the truck tire market is maturing.”
Net debt at the end of March was little changed from 860.5 million euros at the end of last year, according to the company. The measures taken to restore profitability, including job cuts and plant closures will produce “positive effects” as of the middle of this year, Bekaert said in the statement.