ThyssenKrupp AG rose the most in two months in Frankfurt trading after reporting quarterly profit that beat estimates and raising its full-year forecast.
Germany’s largest steelmaker climbed 2.8 percent to 25.57 euros on Tuesday, the biggest gain since March 6. It was the only stock to advance on the nation’s benchmark DAX index.
ThyssenKrupp is reaping the benefit of diversifying from steel to expand its elevator business, industrial division and components unit. The Essen-based company also has cut costs around the world.
Earnings before interest and taxes, excluding one-time items, totaled 405 million euros ($455 million) in the three months through March, up 32 percent from a year earlier and the highest in 14 quarters, it said Tuesday. That beat the 380 million-euro average of 11 analysts’ estimates compiled by Bloomberg.
Profit will reach 1.6 billion euros to 1.7 billion euros in the year through September, the company said in a statement. That’s an increase from 1.33 billion euros a year earlier and exceeds a previous target of at least 1.5 billion euros.
“The increased guidance is no surprise; it fits into the larger picture,” Marc Gabriel, an analyst at Bankhaus Lampe KG, said by phone from Dusseldorf. “The cost program seems to work.”
ThyssenKrupp’s Steel Europe unit posted a 77 percent jump in adjusted EBIT to 113 million euros, also the highest in 14 quarters. The Steel Americas business narrowed its loss to 20 million euros from 27 million euros.
“Our measures to improve efficiency are working and we are moving forward with the transformation of the group,” Chief Executive Officer Heinrich Hiesinger said in the statement. The “earnings improvement reflects our stronger performance focus.”
Quarterly net income slumped 82 percent to 48 million euros as the company booked a loss of about 100 million euros on the sale of its VDM high-performance alloy unit.
Chief Financial Officer Guido Kerkhoff expects the deal to close by the end of September, he said on a conference call. Sales increased 7.1 percent to 11 billion euros.
The world’s biggest steelmaker, ArcelorMittal, cut its profit target on May 7 after lowering its forecast for global demand growth to as little as 0.5 percent this year from as much as 2 percent. The company still expects European demand to rise as much as 2.5 percent.