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Postal giant Deutsche Post AG (DPW.XE) Thursday confirmed its 2009 net profit outlook as shipping volumes looked like they may have reached bottom in the second quarter, and said it will reach its cost-savings target earlier than expected.

The company expects a net profit for 2009 "substantially above" the EUR1.69 billion net loss in 2008. The forecast is based on the valuation of Deutsche Postbank AG (DPB.XE) put options, or options to sell at a specified price.

The market welcomed the news. At 1110 GMT, Deutsche Post shares traded up 3.5% at EUR10.31 while the benchmark DAX index traded down 0.2%. The shares have shed about 10% of their value year-to-date, while the Dow Jones Euro Stoxx Industrial goods and services index has risen about 4%.

The mail and logistics sectors have come under heavy pressure as shipping volumes fell amid sagging demand, but the company said Thursday that "business development in the second quarter confirms our view, expressed after the first quarter, that in percentage terms, volume declines may have seen the bottom."

The Bonn, Germany-based company, which competes with TNT NV (TNT.AE), FedEx Corp. (FDX) and United Parcel Service Inc. (UPS), said it doesn't believe world trade will make a substantial recovery in the coming months, but it expects its full-year adjusted earnings before interest and tax will reach EUR1.2 billion.

The company's EBIT outlook is significantly below estimates, said Per-Ola Hellgren, analyst at LBBW, although he noted that the second-quarter results surpassed his own as well as market expectations.

Deutsche Post now expects to hit its EUR1 billion cost-savings goal in the second quarter of 2010, ahead of previous expectations for the end of 2010. Already in the first half of the year, the company saved costs of EUR413 million.

Reacting to a dramatic downturn in the shipping industry, Deutsche Post in May stepped up its wide-ranging restructuring program to cut costs, including extending working hours and postponing wage increases as well as scrapping organization levels, in an effort to adjust capacity to demand.

"Our first-half figures prove that our vigorous cost-cutting efforts are having a tangible impact throughout the group and we cannot let up now," Chief Executive Frank Appel said in a statement.

Second-quarter net profit dropped 71% to EUR66 million from EUR231 million a year earlier, but clearly surpassed estimates from a Dow Jones Newswires poll of 12 analysts, which forecast a net loss of EUR83 million. The drop mainly was due to higher costs in the mail division and low shipping volumes and low fuel surcharges in the freight division.

Its first quarter net profit had soared to EUR944 million from a EUR383 million profit in the same quarter of the previous year on higher valuations of put options on Postbank shares.

Its closely watched adjusted EBIT fell 38% in the second quarter to EUR257 million, but was helped to some extent by cost reductions mainly in the Express corporate division.

EBIT dropped 70% to EUR109 million and sales fell 18% to EUR11.07 billion, reflecting a steep fall in shipping demand across the globe due to a weak economy.

Company Web site: www.dp-dhl.com

-By Hilde Arends, Dow Jones Newswires; +49 69 29725 506; hilde.arends@dowjones.com

(Kirsten Bienk in Hamburg contributed to this article.)