AMSTERDAM (Reuters) - Better-than-expected quarterly operating profits at AkzoNobel
The results of the owner of the Dulux paint brand over recent quarters have been hit by fragile consumer demand and weak housing markets in the United States and Europe. It has also been affected by the high costs of raw materials, such as titanium dioxide, a pigment used in paint.
But third-quarter operating income excluding impairments was 303 million euros (256 million pounds), beating the forecast of 289 million euros in a poll commissioned by Reuters and rising 22 percent from a year ago thanks to lower restructuring costs and higher volumes.
AkzoNobel reiterated that full-year operating income before incidental items is unlikely to exceed last year's level of 908 million euros.
"The trading environment behind these results has not changed in that demand remains soft and on a comparative basis Q3 last year was particularly weak," Chief Financial Officer, Keith Nichols, said in a statement.
But some analysts said the outlook might be better.
"We consider this (the forecast) as rather cautious," said ING analyst Filip De Pauw.
AkzoNobel has already reported 842 million euros in operating income in the first nine months and revised down its full-year guidance on restructuring charges by 25 million euros to 300 million euros, he added.
AkzoNobel said it expected to incur about 160 million euros in restructuring charges in the fourth quarter, leading to the full-year restructuring charge figure of about 300 million.
By 1127 GMT, Akzo shares were up 8.39 percent while the FTSEurofirst 300 index of European companies <.FTEU3> was flat.
Akzo reiterated that its performance improvement program was on track to be completed in 2013, giving 500 million euros in earnings before interest, tax depreciation and amortization (EBITDA) benefit at the end of the year, a year early.
AkzoNobel - which makes performance coatings for cars, aircraft and ships as well as specialty chemicals for the pulp and paper industry - said in July it would take additional restructuring charges to reflect deteriorating growth prospects in China, India and Brazil.
The company reported third-quarter EBITDA of 456 million euros on revenue of 3.78 billion euros.
Analysts in a poll commissioned by Reuters had expected EBITDA of 457 million euros and revenue of 3.76 billion euros.
In the past 18 months, it has taken a huge writedown on its purchase of Dulux paint maker ICI and sold its struggling North American decorative paints arm to U.S. rival PPG Industries
(Reporting by Karen Rebelo in Bangalore; writing by Sara Webb in Amsterdam; Editing by Supriya Kurane and by Patrick Lannin)