Saint-Gobain Sales Drop Amid European Construction Slowdown
Sales declined to 9.7 billion euros ($12.6 billion), Saint- Gobain, based in Courbevoie near Paris, said in a statement today. Analysts polled by Bloomberg had expected 9.68 billion euros, the average of seven estimates. The company reiterated its 2013 targets.
Chief Executive Officer Pierre-Andre de Chalendar is cutting investments, selling businesses and raising prices to adjust to the European car and construction slump that has hurt demand for flat glass and building materials and put the company’s credit rating under pressure. Moody’s Investors Service and Standard & Poor’s, which rate Saint-Gobain at Baa2 and BBB respectively, have said they may downgrade the company.
“We continue to raise our prices in order to broadly counter the rising cost of raw materials and energy over the year as a whole, while vigorously pursuing our cost cutting program,” the CEO said today. “We anticipate a gradual recovery in the group’s trading over the next few quarters.”
In January, the company agreed to sell its U.S. glass- bottle business for $1.7 billion. In March, It agreed to sell a pipe and foundation business to Westlake Chemical Corp. (WLK) for $175 million.
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