Linde AG, the world’s largest industrial gases company, reported a 9 percent gain in first-quarter profit that matched estimates as a weak euro helped offset sluggish global demand.
Operating profit rose to 1.01 billion euros ($1.1 billion) in the three months through March, the Munich-based company said in a statement on Thursday. That was in line with the average estimate of 11 analysts in a Bloomberg survey. Revenue increased 8.7 percent to 4.4 billion euros.
“In some regions of the world, industrial production was much lower in the first few months of the year than we had expected,” Chief Executive Officer Wolfgang Buechele said in the statement. “This was more than offset by positive exchange rate effects.”
Buechele, who last year reduced medium-term profit goals just five months into the job, is cutting costs as he seeks to offset weak demand and reignite profit growth. The euro’s 11 percent decline against the dollar in the first quarter, precipitated by European Central Bank President Mario Draghi’s unprecedented bond-buying program, has helped to raise profit on the company’s sales outside the continent.
Excluding the impact of the weak euro, both revenue and profit fell, by 0.8 percent and 1.2 percent respectively.
Earnings were “disappointing” on a comparable basis, London-based Liberum analyst Adam Collins said in a note to clients. Profit was “driven by a slightly bigger positive foreign exchange impact due to the weak euro than expected.”
The shares fell as much as 2.6 percent and were trading 0.8 percent lower at 172.35 euros as of 11:13 a.m. in Frankfurt. That pares the year’s gain to 12 percent, valuing Linde at about 32 billion euros.
“The current market environment is characterized by modest trends in industrial production and a cautious approach to major projects,” Buechele said. “Given this environment, we’ll be taking further steps to gear our organization toward profitable growth.”
Linde expects operating profit, which it defines as earnings before interest, taxes, depreciation and amortization, to rise to 4.1 billion euros to 4.3 billion euros from 2014’s 3.9 billion euros, it reiterated on Thursday.
Air Liquide SA, the world’s second-largest industrial gas company, last week reported a 7 percent increase in first-quarter sales, spurred by demand in China and developing economies and the euro’s drop against the dollar.