Saint-Gobain Profit Rises on Rebounding Europe Demand, Cost CutsFrancois de Beaupuy
Cie. de Saint-Gobain SA, Europe’s biggest building materials supplier, reported an 8.7 percent increase in first-half earnings and repeated a forecast for profit growth in 2014 on rebounding demand in the region and in emerging markets.
Operating income climbed to 1.33 billion euros ($1.78 billion) from a restated 1.22 billion euros a year earlier, the company, based in Courbevoie near Paris, said in a statement today. Analysts had predicted 1.35 billion euros, according to the average of seven estimates compiled by Bloomberg.
“After a first quarter boosted by favorable weather conditions in Europe, the second quarter confirmed the slight uptrend in our markets first seen in second-half 2013 across all of our regions,” Chief Executive Officer Pierre-Andre de Chalendar said in the statement. “Only France remains down.”
Saint-Gobain is cutting costs to adjust to the European car and construction slump that has hurt demand for flat glass and building materials. It’s also selling its glass packaging unit to help fund some 4 billion euros of acquisitions by 2018 to expand into faster-growing markets, mostly the U.S. and in emerging economies.
Saint-Gobain completed the $1.7 billion sale of the North American assets of its glass bottle-and-jar unit Verallia to Ardagh Group SA in the first half.
Net income more than doubled to 671 million euros in the period.
“These results, along with our ongoing tight rein on costs, support our objective of a clear like-for-like improvement in operating income for full-year 2014,” Chalendar said.