UPDATE 2-Hochtief raises expectations for 2012 sales and orders

Wed Nov 7, 2012 6:39am EST

Related Topics

* Order backlog, sales to match 2011 levels

* Previously predicted order backlog, sales to decline

* Q3 pretax profit 279.5 mln eur vs poll 268 mln

* Reiterates 2012 earnings targets

* Shares strongest riser on MDAX, up 6 pct (Adds analyst comments, details)

By Peter Dinkloh

FRANKFURT, Nov 7 (Reuters) - Hochtief AG, a German construction and industrial services provider, posted higher than expected third-quarter earnings and raised expectations for orders and sales on Asia and the United States.

Its order backlog and sales this year will match 2011 levels, and not fall as previously predicted, helped by its construction business in the United States and its building and mining operations in Australia, the company, controlled by Spain's ACS, said on Wednesday.

"The order backlog is a bomb," said Bankhaus Lampe analyst Marc Gabriel. "Business in Asia is good, in the Americas extremely good and Europe can at least make up for some disasters of the past."

The Essen-based company had in the past repeatedly surprised with costly mishaps at its risky construction projects and continues to struggle with a concert hall in Hamburg, which analysts have said puts it in danger of missing its full-year profit forecast.

But Hochtief is hoping that the sale of its stake in a Chilean toll road will help offset yet unspecified provisions made on the Hamburg's Elbphilharmonie concert hall.

The order backlog rose 13 percent to 50.4 billion euros, one of the highest order backlogs Hochtief ever recorded.

Profit before tax in the three months through September dropped to 279.5 million euros ($357.8 million), a smaller decline than expected in a Reuters poll, where analysts on average forecast 268 million euros.

TOP GAINER

The stock rose 6 percent by 1007 GMT, making it the biggest gainer on the MDAX index of medium-sized companies, which advanced 0.4 percent, and on the STOXX Europe 600 Construction & Materials index, which climbed 0.5 percent.

"The share price reaction shows that trust that Hochtief can deliver results is coming back," Gabriel said.

The sale of the Chilean toll road, leading to an undisclosed book gain, was the main reason for a pretax profit of 3.3 million euros in the Europe division, while two of the four units of the division were loss making.

The Chilean project is booked in the Europe division as it operates public-private infrastructure projects.

Earnings in the Americas rose 2.4 percent.

The Asia-Pacific division benefited from global demand for raw materials, the most important exports from Australia, where Hochtief controls Leighton, which had reported earnings on Oct. 30.

Hochtief raised earnings expectations at the division.

The company said it still expects 2012 pretax profit of just under 550 million euros and consolidated net profit of just under 180 million. It reiterated that these targets will be "much more challenging" to meet. ($1 = 0.7812 euros) (Editing by Victoria Bryan and David Holmes)

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