* To cut up to 1,300 jobs, 16 pct of staff
* Q3 operating loss 15 mln euros vs market view 47.7 mln
* Sees significant Q4 EBIT loss
* Shares up 7.5 pct
(Adds share reaction, analyst comment)
HELSINKI, Oct 20 Outokumpu said it
expected to report a significant operating loss in its final
quarter as weak demand and prices continued to hit margins
forcing the stainless steel maker to cut up to 1,300 jobs in an
effort to reduce costs.
The Finnish company said it would cut up to one in six jobs
across its business units to reduce annual costs by 100 million
euros ($138 million) by the end of 2012.
Outokumpu was hard hit by the global downturn as customers
halted major investment projects, and it has not seen demand
"Following the summer period, global economic uncertainty
and lower metal prices weakened underlying demand for stainless
steel. Distributors are hesitant about placing orders," the
company said in a statement.
Outokumpu said its fourth-quarter operating loss would be
significant due to lower delivery volume, lower average base
prices and the declining value of raw material inventories.
July-September operating loss, excluding raw
material-related inventory losses and one-offs, was 15 million
euros, near the top of analysts' forecasts which had an average
of 47.7 million.
The company also announced its deputy CEO Karri Kaitue's
departure. Former chief executive Juha Rantanen was replaced by
Mika Seitovirta on April.
Shares in the company, down about 60 percent since the
beginning of the year, traded 7.5 percent higher at 5.51 euros
by 0907 GMT.
Swedbank analyst Erkki Vesola saw few positives in the
"Distributors' stocks are low, so to me the outlook that
they gave for fourth quarter shows the underlying demand must be
very weak," said Vesola.
"But these cost cuts are no doubt necessary for them.
Another good point was that their gearing went down due to good
(Reporting by Tarmo Virki, Jussi Rosendahl; Editing by David
Hulmes and Mike Nesbit)