CEZ AS, the biggest Czech utility, dropped to a four-year low after France’s GDF Suez SA lowered earnings targets and said there is a “demand crisis” for Europe’s energy industry.
The Czech power producer slumped 1.9 percent to 632.5 koruna today in Prague, the second-steepest drop in the PX index, and the lowest close since October 2008. CEZ is down 13 percent this quarter and 20 percent this year.
Utilities were the biggest decliners in Europe after GDF Suez, the continent’s biggest by market value, said profit will shrink next year because of falling demand and low energy prices. GDF slid as much as 16 percent. EON SE, Germany’s largest power producer, said last month it wouldn’t meet profit goals next year.
“The number of utilities’ profit warnings has been rising and the management’s comments are more downbeat than the market expected,” Marek Hatlapatka, an analyst at Cyrrus brokerage in Brno, Czech Republic, said in an e-mail today. “While CEZ is being hit by the more negative sentiment against the sector, I don’t see a risk of a similar earnings revision from them.”