Bank cuts Akzo Nobel earnings outlook on poor Q2

31 July 2008 11:14 [Source: ICIS news]

LONDON (ICIS news)--Citigroup has cut its two-year earnings outlook for Akzo Nobel after the Dutch coatings giant’s second-quarter results released on Tuesday failed to meet expectations, the bank said on Thursday.

The company's earnings before interest, tax, depreciation and amortisation (EBITDA) were likely to decline by at least 7% in 2008, it said, adding it had also cut Akzo Nobel's earnings per share (EPS) forecasts by 10% for 2008 and 9% for 2009.

“Rocketing raw materials costs, weaker demand and/or slowing growth, some evidence of consumers trading down to cheaper products and exchange rates have conspired to hit margins,” said analyst Andrew Benson of Citigroup.

“All these factors were visible but we underestimated their intensity in the second half of 2008 and their speed of impact,” he added.

Akzo Nobel posted an 18% year-on-year drop in second-quarter net income to €184m ($286m) amid weakening economic conditions, ICIS news reported earlier.

($1 = €0.64)

By: Mark Watts
+44 20 8652 3214

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