Cemex seen boosting quarterly profits

Cemex seen boosting quarterly profits
Published: 26 January 2007

Cemex is likely boosted its fourth-quarter operating profit by 31 per cent, helped by higher prices for its products and cost savings, a survey of analysts showed.

Cemex’s net profit will likely be $545m in the quarter, up more than 100 per cent over the year-ago period, when the bottom line was crimped by one-time costs from the takeover of Britain’s RMC Group.

Operating profit, a closely watched measure of the company’s day-to-day activities, was likely $664 million during the fourth quarter, according to the average estimates of six analysts consulted by Reuters.

"Strength in Cemex’s operations in Mexico and Spain should neutralize weakness in the United States and Great Britain," Santander Investment analyst Gonzalo Fernandez said.

The U.S. construction industry has been hit in recent months by a slowdown in homebuilding.

Cemex is due to announce its earnings for the fourth quarter on January 29.

In December, Cemex forecast a 22 pe rcent rise in fourth quarter operating profits to $620 million.

"On the financial front, Cemex should be reaching ... a reduction of practically $1 billion during the quarter," Vector brokerage analyst Carlos Hermosillo said, referring to the firm’s debt load.

Cemex has made a $12bn hostile offer to buy Australian firm Rinker and if the deal goes through Cemex will have to take on new debt to pay for it.