May 6 (Bloomberg) -- Evonik Industries AG, Germany’s second-largest chemical maker, reported first-quarter earnings that missed analysts’ estimates amid lower selling prices for amino acids. The stock dropped the most in 10 months.
Adjusted earnings before interest, tax, depreciation and amortization dropped 24 percent to 463 million euros ($643 million), the Essen-based company said today in a statement. Analysts had estimated 477.9 million euros, according to a Bloomberg survey.
Chief Executive Officer Klaus Engel is pushing a savings drive, including job reductions and slimming the executive board, to help meet a 2014 earnings target of 1.8 billion euros to 2.1 billion euros. The company is already implementing about 300 million euros in cuts out of a target of 500 million euros set for the end of 2016, it said today. Another administration cost-cutting program will start in the second half of the year.
“Selling prices for some important products were well below the year-back level due to challenging market conditions,” Engel said in today’s statement. “However, they were slightly better than at year-end 2013.”
The shares fell as much as 4.3 percent in Frankfurt trading, the steepest intraday drop since July 3, and were down 4 percent at 27.10 euros as of 10:18 a.m. local time. The stock has lost 8.5 percent this year, for a market value of 12.6 billion euros.
Sales at the company’s nutrition unit dropped 5 percent in the first three months of the year. Even though Evonik sold more products, prices for amino acids and animal nutrition were lower, it said. Prices for the company’s most important amino acid, methionine, stabilized compared with the previous quarter, Evonik said.
First-quarter sales were little changed at 3.2 billion euros, compared with the average analyst’s estimate of 3.28 billion euros. Net income declined 43 percent to 166 million euros.
The chemical maker is sticking to a full-year target for sales to rise slightly from last year’s 12.7 billion euros, it said today.
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