UPDATE 3-Deutsche Post ups outlook as freight picks up
* Deutsche Post says now sees 2010 EBIT at 1.9-2.1 bln eur
* Previously saw 2010 EBIT at upper end of 1.6-1.9 bln range
* Now sees DHL division's 2010 EBIT at about 1.3 bln eur
* Q2 adj EBIT 503 mln eur vs poll avg 421 mln
* Shares indicated 4.4 pct higher
(Adds share price indication, trader comment, CEO comment on mail business)
By Maria Sheahan
FRANKFURT, Aug 3 (Reuters) - Europe's biggest mail and express delivery company, Deutsche Post DHL (DPWGn.DE), on Tuesday raised its 2010 outlook after global economic recovery boosted freight volumes in the second quarter.
The news mirrors similarly positive earnings from U.S. rivals United Parcel Service (UPS.N) and FedEx (FDX.N) as the flow of goods around the world continues to rebound following a drop of more than 12 percent last year.
Deutsche Post said the sharp improvement in volumes, compared with the previous year's quarter, affected all its sectors, particularly air freight but also in ocean freight.
That trend could be set to continue, according to the World Trade Organisation, which on July 22 raised its outlook for 2010 global trade growth to more than 10 percent. [ID:nTOE66L07W]
Deutsche Post said it now sees full-year earnings before interest and tax (EBIT) reaching 1.9-2.1 billion euros ($2.5-2.8 billion), boosted by growth in the DHL division, which bundles express, freight and supply chain services.
Second-quarter underlying EBIT almost doubled on the back of growth in the forwarding and freight as well as supply chain businesses, which together generated more than half of Deutsche Post's revenue.
Analysts in a Reuters poll on average expect 2010 underlying EBIT to grow 36 percent to 2 billion euros.
Shares of Deutsche Post were seen rising 4.4 percent, according to premarket data at 0626 GMT.
"Maybe we will see some profit-taking later as rivals FedEx and UPS already reported strong quarterly figures and raised their guidance," a Frankfurt-based trader said. Deutsche Post's stock has already gained 11 percent over the past month.
Shippers around the world have benefited from the global economic recovery over recent months.
UPS, the world's largest express delivery company, and smaller rival FedEx both raised their 2010 outlook last month. [ID:nN21172096] [ID:nN26199061]
Deutsche Post's other main division, the mail business, has suffered from stagnating sales growth and has just launched an electronic letter mail service to offset an increasing reliance of consumers and businesses on e-mail.
"In taking this approach, we will have created the conditions by 2015 that will enable us to think again about growth in the MAIL division - no matter what the competition does," Chief Executive Frank Appel said.
Dutch rival TNT TNT.AS said on Monday it planned to split off its mail division by January 2011 and sell or float it to focus on the higher-growth express business. [ID:nLDE6700DO]
Austrian Post (POST.VI), which has also suffered from sliding demand for letter mail services, is due to publish its quarterly earnings on Aug. 11.
Deutsche Post stock trades at 11.5 times estimated 12-month forward earnings, slightly below TNT and Austrian Post, according to Thomson Reuters StarMine, which weights analyst estimates according to their track record.
UPS and FedEx trade at multiples of 17.0 and 15.4, respectively. ($1=.7650 Euro) (Additional reporting by Christoph Steitz; editing by David Cowell)
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