Thyssenkrupp Cuts Full-Year Forecast

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Thyssenkrupp (TKA.ETR) lowered its full-year forecast on Thursday and said that it would consider strategic alternatives for three of its businesses as it posted a decline in third-quarter revenue amid higher raw material costs for iron ore.

The Essen, Germany-based maker of elevators and steel products reported net sales of 10.22 billion euros ($11.46 billion) in the three months ended June 30, down 3% from the corresponding quarter of the prior year.

It posted a net loss per share of 0.15 euros, a 29% improvement from the prior-year period’s net loss of 0.21 euros per share.

The company said that springs and stabilizers in its Components Technology business, system engineering in its Industrial Solutions unit and heavy plate in the Steel Europe segment had been placed under review. The company said that these businesses represented 4% of the group’s sales but a quarter of the negative cash flow expected in the current fiscal year.

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“We will assess the potential of the three businesses. We definitely see opportunities for their further development but not necessarily under the umbrella of Thyssenkrupp,” Guido Kerkhoff, chief executive, said. “We will not allow a situation to continue where businesses with no clear prospects permanently burn money and destroy value that other areas have created.”

For the full-year, the company is now targeting adjusted earnings before interest and tax of 0.8 billion euros, down from an earlier target of 1.1 billion euros to 1.2 billion euros. It said that the revision came against a background of weaker than expected economic growth and higher raw material costs.

 
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