UPDATE 1-Lanxess sees FY adj profit at lower end of target range

Tue Nov 6, 2012 2:27am EST

* Q3 adj EBITDA 255 mln eur, in line with avg poll

* Expects car sector in Europe to remain weak

* Sees slower growth in North America and China

FRANKFURT, Nov 6 (Reuters) - Lanxess, the world's largest synthetic-rubber maker, expects full-year operating earnings to come in at the lower end of its outlook range, as it is hit by a decline in the European car industry.

"For the fourth quarter Lanxess expects the automotive sector in Europe to remain weak, while growth in North America and China will continue, albeit at a slower rate," the German company said on Tuesday.

The group, a September entrant to Germany's blue-chip index DAX, now expects growth in adjusted 2012 earnings before interest, taxes, depreciation and amortisation (EBITDA) to be at the lower end of a previous guidance range of 5-10 percent.

Lanxess, whose former parent Bayer invented synthetic rubber, is investing heavily to tap long-term growth in Asia and Latin America but Europe remains its largest market.

The shares were indicated down 0.3 percent in premarket trades while the DAX was seen 0.3 percent higher.

The western European auto market in October maintained its sharp descent towards levels last seen nearly 20 years ago as consumers worried about unemployment shunned car dealerships.

Lanxess, a competitor of Exxon Mobil in the synthetic rubber market, derives about a quarter of its sales from tyre makers and about a further 15 percent from other automotive customers.

Speculation that the group's outlook may be losing its footing emerged last month. But Lanxess responded by confirming its full-year earnings outlook at the time.

Key customers have been feeling the pinch from weakening car demand. Goodyear, the largest U.S. tyre maker, said third-quarter profit fell on lower sales in all its key markets, especially Europe.

Lanxess' third-quarter adjusted EBITDA fell 18 percent to 255 million euros ($326 million), broadly in line with the average estimate in a Reuters poll of 11 analysts.

At 2.16 billion euros, quarterly sales came in 4 percent below market projections.

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