DHL Owner Deutsche Post Expected to Report Lower Earnings -- Earnings Preview

By Adria Calatayud

DHL owner Deutsche Post is scheduled to report results for the second quarter on Thursday. Here is what you need to know.

SALES FORECAST: The German logistics group, also known as DHL Group, is expected to report revenue of 20.275 billion euros ($21.93 billion), according to consensus estimates compiled by the company. For the same period of 2023, the company generated revenue of EUR20.09 billion.

EARNINGS FORECAST: The group's earnings before interest and tax are forecast at EUR1.32 billion, according to the consensus, down from the EUR1.69 billion for the year-earlier period.

NET PROFIT FORECAST: Net profit is estimated at EUR754 million, according to the same consensus, which would represent a fall from EUR978 million.

Shares in Deutsche Post fell 5.3% over the second quarter. Since the start of the year through Tuesday's close, the stock lost 8.5%.

WHAT TO WATCH

--Warburg analysts see Deutsche Post's guidance at risk, saying a revision or narrowing to the lower end of the current range shouldn't be ruled out. The company expects EBIT for 2024 to range from EUR6.0 billion to EUR6.6 billion, but consensus estimates sit at EUR6.06 billion.

--In its first-quarter results in May, the company said it hadn't yet experienced a pick-up in activity in its business-to-business units. There isn't a material shift in economic data that would point to a meaningful improvement in business-to-business volumes in the group's Express division now either, Morgan Stanley analyst Cedar Ekblom wrote in a note to clients. Investors will likely focus on recent volume trends in the Express business with an eye on the third quarter, UBS analysts Cristian Nedelcu and Amy Yi Li said in a note. Express volumes could grow at low single percentage digits in the third quarter, according to UBS.

--The volume recovery in the group's Express division seems unlikely to be strong and, if this turns out to be the case, the company might emphasize cost-cutting, the UBS analysts said. In May, Deutsche Post already said cost control was its main short-term focus to protect profitability.

Write to Adria Calatayud at adria.calatayud@wsj.com

(END) Dow Jones Newswires

July 31, 2024 07:41 ET (11:41 GMT)

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