TNT Express, the Dutch delivery company being acquired by U.S. rival UPS, reported a 12 percent drop in third quarter earnings as pressure on European margins outweighed improvement in Asia-Pacific and the Americas.
Operating profit dipped to $49.4 million (38 million euros) from $55.9 million a year earlier as adjusted revenue declined 1.9 percent, to 1.7 billion euros.
The company said it is confident European Union antitrust regulators will approve the $6.8 billion acquisition by UPS. It expects the deal to close in early 2013.
TNT said volume growth was good in Europe, the Middle East and Africa with net customer gains but “challenging trading conditions ... led to negative price and mix development.” Revenue edged up to $1.4 billion from $1.4 billion and profit dropped to $72.8 million from $93.6 million.
It said operating income improved significantly in the Asia-Pacific region despite weak Asia-Europe demand, with most units booking better results. Profit of $3.9 million represented a reversal from a year-earlier loss of $10.4 million, despite revenue easing to $525 million from $598 million.
Results improved in the Americas, but turning around the Brazilian business “is proving to be more challenging than had been expected,” the company said. Revenue rose to $158.6 million from $151 a year earlier while losses fell to $29.9 million from $39 million.
The company said it is preparing a response to the EU’s statement of objections to the UPS takeover issued Oct. 19. “Open and constructive dialogue continues,” it said.
TNT is negotiating the sale of its cargo airline, TNT Airways, which UPS can’t buy because of EU rules preventing non-European companies from controlling EU-registered carriers.