By Nina Kienle
Heidelberg Materials said it slightly raised its 2024 guidance after an increase in third-quarter results that beat expectations.
The German building materials group on Thursday said that its results from current operations before depreciation and amortization--the company's preferred metric--for the three months ended September was 1.45 billion euros ($1.56 billion) compared with 1.39 billion euros in the prior-year period.
"Our persistently strong performance in North America combined with a continued focus on cost management across key markets helped offset volume headwinds and contributed to further increasing our operational result and improving our profitability," Chairman Dominik von Achten said.
Results from current operations rose to 1.12 billion euro from 1.08 billion euro, with revenue that rose to 5.76 billion euro from 5.61 billion euro.
Analysts had expected third-quarter revenue at 5.60 billion euros, results from current operations before depreciation and amortization at 1.42 billion euros, and results from current operations at 1.10 billion euros, according to consensus estimates provided by the company.
The company lifted its full-year guidance for results from current operations to range between 3.1 billion and 3.3 billion euros. It previously targeted a range of between 3.0 billion and 3.3 billion euros. Return on invested capital is still expected to be around 10%, it said.
"Heidelberg's third-quarter results were more resilient than those of competitors that have reported so far," Capital Markets Research analysts Anthony Codling and Oliver Dyson said in a note. The small change in guidance is a meaningful one given the economic backdrop and weather patterns the group, they said.
In addition the analysts believe that Heidelberg Materials continues to lead the way on innovation and the launch of a new cost program should further enhance the operating results.
"All-in-all, a pleasant surprise for what were expected to be quite dull results," Jefferies analysts said in a note to clients. The analysts believe the change in guidance might edge up consensus estimates.
In October, construction and infrastructure company Vinci posted an increase in revenue for the third quarter, but warned that the potential new French tax could weigh on profit this year. Building material companies Compagnie de Saint-Gobain and Holcim both posted a drop in third-quarter sales, however, both backed their 2024 guidance.
Shares trade 7.3% higher at 115.65 euro.
Write to Nina Kienle at nina.kienle@wsj.com
(END) Dow Jones Newswires
November 07, 2024 04:44 ET (09:44 GMT)
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