UPDATE 2-Austrian Post scraps outlook as crisis hits volumes
* Q1 EBIT 47.8 million euros vs Reuters poll 46 million
* Scraps outlook for stable revenue, earnings
* Expects first-quarter trends to continue
* Cuts costs, investments, staff
* Shares down as much as 5 percent
(Adds background, analyst comment, share price)
VIENNA, May 19 (Reuters) - Austrian mail company Oesterreichische Post (POST.VI) scrapped its outlook for stable revenue and profit this year after first-quarter operating earnings dropped 4.3 percent due to a sales decline.
Earnings before interest and tax (EBIT) came in at 47.8 million euros ($64.4 million) in the quarter, while revenue declined 2.4 percent, mainly on lower letter volumes. Analysts had expected 46 million euros in EBIT on average. [ID:nLE894186]
The state-owned operator said on Tuesday the economic crisis would weigh more on letter, parcel and direct mail volumes than previously expected, and withdrew its outlook for the year.
"Austrian Post is not in a position to seriously provide a detailed revenue and earnings outlook for 2009 at this time," it said in a statement. "We anticipate that the trends manifested in the first quarter will continue for the time being."
The operator previously said revenue and earnings would be stable if the crisis did not get worse than expected, but did not rule out that they would fall either. [ID:nLC498247]
Shares in Austrian Post, which had risen to a two-month high on Monday, dropped as much as 5 percent to 23.09 euros.
Analysts from UBS said they expected mail volumes, which are traditionally resilient in economic downturns, to prove more cyclical in the current crisis, which together with Austrian Post's inflexible cost structure put pressure on the group.
"Austrian Post is unlikely to prove defensive in 2009 due to a combination of weak mail volumes and an inflexible cost structure," UBS said in a note to clients. "On this basis, we believe the company's reputation as a stable business with dependable cash flows may not continue."
Deutsche Bank cuts its rating to Hold from Buy. Continued...
