Thyssenkrupp lifts profit outlook after strong third quarter

Thyssenkrupp on Thursday reported a sharp improvement in third-quarter results, helped by higher sales, stronger operating performance and positive one-off effects, and raised the lower end of its full-year profit outlook.

The German industrial and technology group said its net income attributable to shareholders improved to break-even, compared with a loss of €278 million ($321 million), or €0.45 per share, a year earlier.

The improvement included a €407 million impairment reversal related to the sale of thyssenkrupp's stake in Hüttenwerke Krupp Mannesmann, or HKM, as well as a €131 million positive accounting effect at Steel Europe from the transaction. Operational profit also improved at Steel Europe, Materials Services and Marine Systems, according to the group.

Profit before tax was €104 million, compared with a loss of €53 million in the year-earlier quarter. Earnings before interest and taxes (EBIT) swung to a profit of €222 million from a loss of €52 million, while adjusted EBIT increased 18% to €183 million from €155 million.

Earnings before interest, taxes, depreciation and amortization (EBITDA), however, declined 72% to €61 million from €219 million, primarily reflecting significant restructuring costs and special items across segments, as well as lower earnings at Decarbon Technologies and Automotive Technology.

Sales increased 8% to €8.786 billion from €8.151 billion in the prior-year quarter.

Meanwhile, order intake declined 24% to €7.723 billion from €10.145 billion, mainly reflecting substantial order extensions received by Marine Systems in the year-earlier quarter.

Looking ahead, thyssenkrupp raised the lower end of its full-year profit outlook. 

The company now expects adjusted EBIT of €600 million to €900 million, compared with its previous range of €500 million to €900 million. The forecast for net income was narrowed to a loss of €400 million to €700 million, from the previous range of €400 million to €800 million. Sales are now expected to decline 1% to 3% year-on-year, compared with the previous forecast of a 0% to 3% decline.

Thyssenkrupp shares rose 3.08% before closing at €12.40 on Xetra on Wednesday.