TNT NV, Europe's second-biggest express-delivery service, said first-quarter profit fell after last year's earnings were boosted by the sale of the freight-management unit, as fewer working days and an early Easter holiday restrained revenue.
Net income declined 58 per cent to 179 million euros (S$381.3 million), or 49 cents a share, from 427 million euros, or 1.09 euros, a year earlier, the Hoofddorp, Netherlands-based company said yesterday in a statement.
Analysts surveyed by Bloomberg had expected 189 million euros. Sales rose 1.8 per cent to 2.72 billion euros.
TNT faces increasing competition in its home market from Bonn-based Deutsche Post AG and local operators such Sandd BV.
Mail-unit earnings this year were hurt by two fewer working days than in 2007, while the early Easter holiday break in March held back express-delivery growth.
'A set of very unexciting results with limited comparability' to last year, Axel Funhoff, an analyst at ING in Brussels with a 'buy' recommendation on the stock, said in a note to investors yesterday.
TNT dropped as much as 36 cents, or 1.4 per cent, to 24.62 euros in Amsterdam trading and changed little at 25.08 euros at 9.57am. The stock has declined 11 per cent this year.
Net income last year was boosted by a 195 million-euro gain from the sale of the freight-management business to Paris-based Geodis SA, a shipping and mail-handling company.
Earnings before interest and taxes fell 18 per cent to 289 million euros. Analysts had expected 298 million euros.
TNT reiterated a forecast yesterday that the express unit's International & Domestic operations will generate 'high single-digit' sales growth this year, excluding acquisitions, and that Ebit as a proportion of sales will be in the low double-digit percentage range.
The mail unit is expected to generate low single-digit revenue growth, also excluding takeovers, and an operating margin of about 16.5 per cent, TNT said, repeating earlier targets.
'Although financial markets and global economic contexts remain volatile, TNT so far experiences market circumstances in line with its outlook as given,' it said yesterday.
Ebit at the mail unit fell 16 per cent to 194 million euros. Ebit at the express-delivery division fell 18 per cent to 106 million euros.
TNT won a legal challenge last month to Germany's postal-industry minimum wage, which the Dutch company said protects larger competitor Deutsche Post following the opening of the German letter-delivery market this year. An extension of minimum wages to all postal carriers in the country is against the law, a Berlin court ruled. Germany's government appealed the ruling.
'The appeal procedure is expected to take place within the next two to six months,' TNT said yesterday.
The Dutch company has threatened to exit the German mail business should it lose the dispute.
TNT has bought express-delivery companies and mail carriers abroad, including stakes in two German regional services in 2007, as both the Netherlands and Germany are prepared to allow any company to carry letters of any size starting this year.
The Dutch government decided in December to postpone deregulating its market following the German minimum-wage decision. Parliament had tied the policy to the presence of a 'level playing field' in the European Union, which means postal liberalisation can be stopped if other EU countries take measures that hurt competition.
The Netherlands opened the market in 2000 for handling mail items weighing more than 50g, retaining TNT's legal monopoly on lighter letters. Direct mail is excluded from that monopoly.
Net income declined 58 per cent to 179 million euros (S$381.3 million), or 49 cents a share, from 427 million euros, or 1.09 euros, a year earlier, the Hoofddorp, Netherlands-based company said yesterday in a statement.
Analysts surveyed by Bloomberg had expected 189 million euros. Sales rose 1.8 per cent to 2.72 billion euros.
TNT faces increasing competition in its home market from Bonn-based Deutsche Post AG and local operators such Sandd BV.
Mail-unit earnings this year were hurt by two fewer working days than in 2007, while the early Easter holiday break in March held back express-delivery growth.
'A set of very unexciting results with limited comparability' to last year, Axel Funhoff, an analyst at ING in Brussels with a 'buy' recommendation on the stock, said in a note to investors yesterday.
TNT dropped as much as 36 cents, or 1.4 per cent, to 24.62 euros in Amsterdam trading and changed little at 25.08 euros at 9.57am. The stock has declined 11 per cent this year.
Net income last year was boosted by a 195 million-euro gain from the sale of the freight-management business to Paris-based Geodis SA, a shipping and mail-handling company.
Earnings before interest and taxes fell 18 per cent to 289 million euros. Analysts had expected 298 million euros.
TNT reiterated a forecast yesterday that the express unit's International & Domestic operations will generate 'high single-digit' sales growth this year, excluding acquisitions, and that Ebit as a proportion of sales will be in the low double-digit percentage range.
The mail unit is expected to generate low single-digit revenue growth, also excluding takeovers, and an operating margin of about 16.5 per cent, TNT said, repeating earlier targets.
'Although financial markets and global economic contexts remain volatile, TNT so far experiences market circumstances in line with its outlook as given,' it said yesterday.
Ebit at the mail unit fell 16 per cent to 194 million euros. Ebit at the express-delivery division fell 18 per cent to 106 million euros.
TNT won a legal challenge last month to Germany's postal-industry minimum wage, which the Dutch company said protects larger competitor Deutsche Post following the opening of the German letter-delivery market this year. An extension of minimum wages to all postal carriers in the country is against the law, a Berlin court ruled. Germany's government appealed the ruling.
'The appeal procedure is expected to take place within the next two to six months,' TNT said yesterday.
The Dutch company has threatened to exit the German mail business should it lose the dispute.
TNT has bought express-delivery companies and mail carriers abroad, including stakes in two German regional services in 2007, as both the Netherlands and Germany are prepared to allow any company to carry letters of any size starting this year.
The Dutch government decided in December to postpone deregulating its market following the German minimum-wage decision. Parliament had tied the policy to the presence of a 'level playing field' in the European Union, which means postal liberalisation can be stopped if other EU countries take measures that hurt competition.
The Netherlands opened the market in 2000 for handling mail items weighing more than 50g, retaining TNT's legal monopoly on lighter letters. Direct mail is excluded from that monopoly.