Saint-Gobain Keeps 2014 Earnings Guidance Despite Revenue Decline

By William Horobin

PARIS--French building materials company Compagnie de Saint-Gobain SA (SGO.FR) Wednesday stuck to its full-year outlook as its earnings improved in the first half, despite a decline in revenue.

The French company's revenue fell 1% to EUR20.45 billion ($27.46 billion) in the first half due a fall in the value of currencies where Saint-Gobain sells its products. But operating profit rose 8.7% to EUR1.33 billion, aided by EUR240 million of cost-cutting measures. The company's net profit more than doubled to EUR671 million, boosted by asset disposals and a decrease in provisions.

For this year, Saint-Gobain expects operating income excluding the effect of currency fluctuations, asset sales and acquisitions to show a "clear improvement," the company said. On the same basis, operating profit income rose 9.7%, the company said.

"After a first quarter boosted by favorable weather conditions in Europe, the second quarter confirmed the slight uptrend in our markets," Chief Executive Pierre-Andre de Chalendar said in a statement.

Excluding the impact of foreign exchange, growth was particularly strong in Asia, emerging countries and in North America, Saint-Gobain said. But the home market of France continued to be affected by a decline in new building.

Write to William Horobin at [e-mail]

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