Deutsche Post DHL Lost $123 Million

Deutsche Post DHL lost $123 million in the third quarter, reflecting costs involved in DHL's exit from the U.S. domestic parcel delivery market and the bankruptcy of a major customer, German retailer Arcandor.

Revenue fell 18.6 percent to $16.5 billion, and third quarter operating income fell to $340 million from $1.4 billion a year ago.

Those results beat expectations and allowed the world's biggest logistics company to raise its profit forecast for the full year. The German mail and express delivery group said it now expects earnings before interest and tax to reach at least $2 billion this year against a previously forecast $1.76 billion as cost cuts counter slumping cargo volume.

"With our cost management bearing fruit we are able to mostly offset the negative effects of the [global economic] crisis," said CEO Frank Appel.

"Although we see initial positive signals with the stabilization of transport volumes, there's still no indication of a full scale economic recovery," Appel said. "Therefore we can't ease up, we must accelerate our efforts.”

Express revenue plunged by nearly $1.5 billion in the third quarter to $3.7 billion, reflecting lower volume and the withdrawal from the U.S. market. But express profits rose to $193 million from $35.3 million a year ago and the division remained in profit even after deducting one off U.S. restructuring charges.

The global freight forwarding unit reported higher ocean and air cargo volumes but revenue shrunk 30 percent to $3.8 billion due to lower freight rates and fuel surcharges.

Contact Bruce Barnard at brucebarnard47@hotmail.com.