UPDATE 2-Koppers Q1 profit beats Wall Street, shares jump

Thu May 6, 2010 1:17pm EDT

* Q1 adj EPS $0.40 vs est. of $0.37

* Q1 revenue up 2 pct to $274.3 mln

* Says end-market demand improving for most products

* Shares rise 19 pct (Adds CEO and analyst comments, updates shares movement)

By Antonita Madonna Devotta

BANGALORE, May 6 (Reuters) - Carbon-compounds maker Koppers Holdings Inc (KOP.N) posted a first-quarter profit that beat analyst estimates, helped by higher volumes and prices at its core segment, sending its shares up 19 percent.

"We continue to see increased stability and growth in our end markets and we remain very positive about the long term strength of our primary end markets-aluminum and railroads," Chief Executive Walter Turner said on a conference call with analysts.

Pittsburgh, Pennsylvania-based Koppers' shares climbed to as much as $32.42, before paring some of their gains. They were trading up 15 percent at $31.39 Thursday afternoon on the New York Stock Exchange.

The company's carbon materials and chemicals segment, which processes coal tar used in the production of aluminum and accounts for about 63 percent of its total revenue, posted a 19 percent rise in sales during the quarter.

In the latest quarter, the company earned $7.3 million, or 36 cents a share, compared with $4.1 million, or 20 cents a share, a year ago. Excluding items, the company earned 40 cents a share.

Revenue for the quarter rose marginally to $274.3 million. However, its railroad and utility products segment saw sales fall 21 percent.

"While the railroad and utility product business was up against a difficult comp during the quarter and results were impacted by weather, we suspect the outlook should improve during the second half of 2010 as commercial railroad markets rebound," KeyBanc capital Markets analyst Douglas Chudy said.

CEO Turner said he expects the segment to recover as stimulus spending and economic recovery gain momentum in the second half of 2010, when spending in this market also typically ramps up.

"Favorable longer-term demand prospects and a favorable cost position should support further improvement in Koppers' earnings power over the next 2-3 years, in our view," Jefferies & Co analyst Laurence Alexander said. (Reporting by Antonita Madonna Devotta in Bangalore; Editing by Anne Pallivathuckal)

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