Saint-Gobain Lowers Expectations After Weak Third Quarter

By Inti Landauro 

PARIS--French construction materials group Compagnie de Saint-Gobain SA on Wednesday lowered its profitability target after a weak third quarter when the macroeconomic environment was tougher than expected.

The company said it now expects to maintain its operating profit on a like-for-like basis in 2015 and that it will be at least the level of last year, while three months ago it expected an increase.

Like construction companies and other suppliers to the industry, Saint-Gobain is still struggling to recover from the hit it took following the sovereign debt crisis in Europe which led to housing slumps in many countries and cuts in government spending in public works in many others.

"The third quarter reflects a disappointing economic climate versus our expectations, with a contraction in France - which is not yet showing any signs of improvement - as well as moderate growth in other Western European countries," the company's Chief Executive Pierre-André de Chalendar said in a statement.

Business in Brazil will slow down, while it will grow slightly in other emerging markets, the French company said.

Third-quarter sales fell to 9.97 billion euros ($11.07 billion), down from 10.37 billion euros in the same period last year, though when excluding the effects of currency swings and asset sales and acquisitions as well as changes in accounting, sales rose 2.2%, Saint-Gobain said.

According to FactSet, analysts expected average sales of 10.08 billion euros.

The company doesn't disclose profitability data for the third quarter.

-- Write to Inti Landauro at [e-mail]

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October 28, 2015 14:20 ET (18:20 GMT)

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