TNT Express sees fragile recovery in Europe

A courier van of TNT is driven in Hoofddorp, the Netherlands March 19, 2012. REUTERS/Robin van Lonkhuijsen/United Photos

AMSTERDAM (Reuters) - Dutch delivery group TNT Express said on Monday it saw signs of improvement in its main European markets, although overall the recovery was fragile.

Shares in TNT Express, which reported third-quarter profit roughly in line with forecasts, rose more than 3 percent, and were up 3.7 percent at 7.052 euros by 8:23 a.m. British time.

Chief Financial Officer Bernard Bot said Britain, Germany and Benelux (Belgium, Netherlands, Luxembourg) markets had shown the strongest signs of recovery, while Italy and Spain still faced challenges.

"It's a mixed picture with some positive signs but overall fragile," Bot said.

TNT Express was forced to come up with a standalone strategy after the European Commission, Europe's market regulator, blocked UPS's 5.2 billion euro (4.4 billion pounds) takeover offer in January because of competition concerns.

It has already announced cost cuts and divestments. Its troubled Brazil business, which is up for sale, reduced its quarterly loss to 6 million euros from 25 million euros a year ago.

"The results give comfort that the turnaround has started, both on cost savings and on early signs of improvement in Europe," ING analyst Marc Zwartsenburg said in a research note.

Quarterly adjusted operating profit fell 15.6 percent to 54 million euros, on revenue of 1.62 billion euros that was down 6.6 percent.

Analysts in a poll commissioned by Reuters had expected adjusted operating profit of 52.7 million euros on revenue of 1.696 billion euros.

(Reporting by Sara Webb; Editing by Patrick Graham and Mark Potter)