UPDATE 1-Bilfinger sees cost cuts boosting profits this year

Thu May 8, 2014 3:55am EDT

Related Topics

* Q1 EBITA 22 mln eur vs Rtrs poll 29.4 mln

* Output volume 1.88 bln eur vs Rtrs poll 1.92 bln

* Sees output volume of 8 bln eur for 2014, higher earnings

* Shares up 3.8 pct (Adds forecast, industry details)

By Marilyn Gerlach

FRANKFURT, May 8 (Reuters) - German engineering and services company Bilfinger SE posted a steeper-than-expected drop in core quarterly earnings on lower demand for its industrial and power businesses, but forecast cost cuts would boost earnings later this year.

Its shares - which had fallen the previous session to their lowest since early February - rose 3.8 percent to 87.21 euros by 0750 GMT.

Bilfinger said on Thursday earnings before interest, tax and amortization (EBITA) fell 56 percent to 22 million euros ($30.6 million), missing the average analyst estimate in a Reuters poll of 29.4 million.

Bilfinger is shifting away from building roads and bridges to focus on services such as designing and maintaining plants for the oil and gas, petrochemicals, pharmaceuticals and food and beverage industries.

It is on an acquisition spree to grow the new businesses, while hiving off assets vulnerable to cyclical swings. It said late on Wednesday it plans to sell large parts of its construction division.

First-quarter output volume rose 1 percent to 1.88 billion euros, missing the average estimate of 1.92 billion.

But Bilfinger said output volume will increase to at least 8 billion euros in 2014, up from 7.7 billion last year, excluding construction operations which are up for sale.

An expected increase in output volume in the remainder of the year as well as cost cuts would result in an significant gain in 2014 adjusted EBITA, it added.

($1 = 0.7183 Euros) (Editing by Thomas Atkins and David Holmes)

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