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Deutsche Post sees 3Q profits fall, cuts outlook

Deutsche Post sees 3Q profits fall, cuts outlook

Deutsche Post AG slashed its earnings forecasts for both 2008 and 2009 on Monday, saying it expects pretax profit to fall 8 percent in the third quarter as the financial crisis takes its toll.
Separately, the mail and logistics company's Deutsche Postbank AG retail banking unit said it would raise capital by issuing new shares and said it expects a pretax loss of 449 million euros ($561 million) in the third quarter.
Parent company Deutsche Post forecast a roughly 8 percent reduction in earnings before interest and taxes "as the global economic environment deteriorated markedly."
It did not give an exact figure, but said last year's figure was 468 million euros.
The company reports full third quarter earnings on Nov. 10.
Deutsche Post said it now expects a pretax profit for 2008 of around 2.4 billion euros ($3 billion) _ some 10 percent below last year's result and 17 percent below its previous guidance.
The company previously had forecast earnings this year of about 2.9 billion euros ($3.6 billion) adjusted for accounting changes after its agreement last month to sell a 29.75 percent stake in Postbank to Deutsche Bank AG.
"The third quarter was a challenging quarter and we expect the overall environment to remain so in the near future," said John Allan, the company's chief financial officer.
Part of that challenge was in its express unit, which includes logistics and delivery company DHL. The express division's underlying pretax profit slipped 30 million euros ($37 million).
The unit has been hampered by a deteriorating U.S. market where DHL's competitors include UPS Inc. and FedEx Corp.
Deutsche Post said it expects world economic growth to continue to slow or slide into a recession in some developed markets _ with a likely impact on business prospects in 2009.
"Even though the group expects to make profit progress in 2009, it has chosen to withdraw its previous guidance for the year of around 3.4 billion euros ($4.25 billion)" in underlying EBIT, the company said in a statement.
Deutsche Post said it expects to issue a fresh guidance "when the economic prospects are sufficiently clear."
Postbank said its board plans to issue 54.8 million new shares at 18.25 euros ($22.81) each some time in the fourth quarter. It said details would come later.
Shares of Deutsche Post were 17.5 percent lower at 7.98 euros ($9.82) in Frankfurt. Postbank shares were down 19.4 percent at 15.12 euros ($18.60).
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