Deutsche Post Q1 beats on Asian express demand

By @ibtimes on

Deutsche Post DHL's earnings beat estimates in the first quarter as demand from Asia boosted profits at its express delivery business.

The positive performance was largely the result of markedly higher volume of international shipments, Europe's biggest mail and express delivery company said on Tuesday.

This trend more than offset the sale of the domestic express business in the United Kingdom and France.

As the economy improves, companies spend more on shipping goods with Deutsche Post's express delivery and freight businesses, pushing up freight rates especially in fast-growing markets such as Latin America, the Middle East and Asia.

The World Trade Organization has forecast international trade would expand by 6.5 percent this year, above the average rate between 1990 and 2008 percent but falling short of last year's dramatic rebound of 14.5 percent.

Deutsche Post generated almost 14 percent of group revenue in Asia-Pacific, its fastest-growing market. It still generates about two thirds of revenues in its European home market.

Deutsche Post's first-quarter underlying earnings before interest and tax (EBIT) rose 11 percent to 629 million euros, beating a 592 million euro analysts' consensus figure.

Deutsche Post still expects its 2011 EBIT to grow to between 2.2 billion euros and 2.4 billion euros this year after coming in at 1.8 billion in 2010. Analysts on average see EBIT of just below 2.4 billion euros.

Deutsche Post echoed comments by United Parcel Service , the world's largest package delivery company, which last month reported robust quarterly profit as it raised rates and kept a lid on costs, helping margins even as fuel prices spiked.

Rival FedEx , another economic bellwether, has said it sees improving revenue and profit in its fourth quarter to end-May, thanks to growing volume, rate increases and expected gains from the restructuring of a freight segment.

(Editing by Mike Nesbit)

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