August 5, 2014 / 6:40 AM / 4 years ago

UPDATE 1-Voestalpine posts slip in operating income but keeps outlook

* Q1 EBIT down 1.4 pct at 218.4 mln eur vs poll avg 234 mln

* Revenue down 2.4 pct at 2.83 bln vs poll avg 2.92 bln

* Keeps outlook for higher 2014/15 operating profit (Adds details and background)

VIENNA, Aug 5 (Reuters) - Specialty steelmaker Voestalpine’s first-quarter operating income eased 1.4 percent, missing expectations as revenue dipped amid a still patchy economic recovery.

It nevertheless kept its outlook for operating profit to be “somewhat higher” this fiscal year, noting it was operating at nearly full capacity and had “very sound” order books that were likely to stay healthy for the rest of 2014.

The Austrian company said on Tuesday earnings before interest and tax (EBIT) fell to 218.4 million euros ($293.1 million) in the quarter to end-June, giving it an EBIT margin of 7.7 percent, the same as a year earlier.

Analysts had on average expected EBIT to rise 4.9 percent to 234 million euros, according to a Reuters poll.

Revenue fell 2.4 percent to 2.83 billion, also missing market expectations on what the company attributed to lower pre-material costs and closure of a rail plant in Germany.

Improved financial results and a lower tax rate helped boost earnings per share 13 percent to 0.77 euros, in line with market expectations.

Voestalpine is increasingly focusing on niche and premium products such as special rails and tool steel, which protect it from weakness in the commodity steel market, although Steel is still its biggest division.

Automakers are Voestalpine’s single biggest customer group, and most of its sales are still in Europe, although it is expanding its non-European business at a rapid pace.

ArcelorMittal, the world’s biggest steelmaker, last week cut its forecast for earnings this year after lower-than-anticipated iron-ore prices ate into the profit of its mining business.

$1 = 0.7451 Euros Reporting by Michael Shields; Editing by Sophie Walker

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