Steelmaker Acerinox posts strong profit beat, sending shares to 19-year highs (updated)
UPDATE 3-Steelmaker Acerinox posts strong profit beat, sending shares to 19-year highs Updates shares in paragraph 4, adds CEO quotes in paragraphs 5-6, context in paragraph 7.
By Javi West Larrañaga
July 24 (Reuters) - Spanish steelmaker Acerinox ACX.MC reported a higher-than-expected second-quarter profit and pointed to further growth in the third quarter on Friday, sending its shares to their highest price since January 2007.
The stainless steel producer reported quarterly core earnings of €176 million ($200 million), up 57% from a year ago. Analysts polled by LSEG had expected them to rise to €154 million on average.
The company said it expected third-quarter earnings to be sequentially higher, driven by the strong U.S. market and a gradual recovery in Europe.
Its shares were up 8.5% at 0840 GMT, among the top performers on Europe's benchmark STOXX 600 index .STOXX, after crossing 10% earlier in the session.
Acerinox estimated that higher energy and transport costs due to the war in the Middle East caused a €6 million hit in the quarter, though CEO Bernardo Velazquez told Reuters the company was mostly passing those costs to buyers.
Velazquez also highlighted the turnaround at Acerinox Europa, saying the beleaguered unit broke even at the core earnings level in June.
The company's U.S. mills make about 90% of its core earnings, according to a J.P. Morgan estimate.
Acerinox has benefitted from increased protectionism in its main markets, from U.S. President Donald Trump's 50% tariffs on steel imports to the European Union's carbon levy on high-emission imports and its recently enacted policy to halve steel import quotas from outside the bloc.
European hot-rolled coil prices EHRc1 are up about 33% in the past 12 months at €705 per metric ton. While further increases should remain muted for the summer, they should pick up again in the fourth quarter and move towards the €800 mark, Jefferies wrote in a June note.
($1 = 0.8790 euros)
(Reporting by Javi West Larrañaga in Gdansk, editing by Milla Nissi-Prussak)
((Javier.West@thomsonreuters.com; +34 918 35 61 12;))