Germany's Metro Shares Dive After Operating Earnings Fall -- Update

By Ulrike Dauer

FRANKFURT--Shares of Metro AG (MEO.XE) fell more than 8% Tuesday morning after the German retailer reported third-quarter operating earnings fell and net profit was flattered by a lower tax rate.

The company, which operates food, wholesale and retail-electronics stores, said its earnings before interest and taxes excluding special items--a yardstick of operating performance--fell 26% to 154 million euros ($172 million), mainly because of lower profit in its Media-Saturn consumer electronics division, currency-translation effects, and lower real-estate disposal gains.

One-off costs of EUR190 million, mainly related to restructuring Metro's Cash & Carry business, also weighed.

Sales fell 2.7% to EUR13.59 billion, primarily because of negative currency-translation effects.

Adjusted net profit for the fiscal third quarter rose to EUR79 million from EUR22 million in the same period last year, boosted by a significantly lower tax rate.

At 0951 GMT, Metro was the biggest decliner on the MDAX with its shares down 6.9% at EUR26.51.

Baader Helvea analyst Volker Bosse noted the disappointing EBIT in the consumer electronics segment. While Metro confirmed its full-year guidance of slightly higher sales and EBIT, "despite the persistently challenging economic environment," several traders doubted it would reach those targets.

Metro recently said it would divide its business into food and electronics divisions, which received a positive response from analysts.

Write to Ulrike Dauer at [e-mail]

(END) Dow Jones Newswires

August 02, 2016 06:51 ET (10:51 GMT)

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