ThyssenKrupp confirms full year outlook after better-than-expected Q3
Comment of the Day

August 10 2012

Commentary by Eoin Treacy

ThyssenKrupp confirms full year outlook after better-than-expected Q3

This article from Reuters may be of interest to subscribers. Here is a section:
ThyssenKrupp, which also makes submarines, elevators, automotive components and industrial plants, said on Friday adjusted earnings before interest and tax (EBIT) in the quarter to June fell 79 percent to 122 million euros ($150.17 million)compared with 570 million the year-earlier.

Analysts in a Reuters poll on average expected EBIT, excluding special items of 78.0 million euros, down 86.2 percent.

ThyssenKrupp said it still expected to post operating profit in a mid-three-digit million euro range in the 12 months through end-September.

Eoin Treacy's view As what might be considered a value-added steel producer ThyssenKrupp fell somewhat more that other steel producers as investors reacted to the threat of contracting global growth rates. However, as optimism towards the possibility of increased stimulus from Chinese, European and US monetary authorities improves, a number of related shares have bounced rather well. (Also see Comment of the Day on July 25th for a review of steel producers).

ThyssenKrupp (2.2% found support in the region of the 2008 low from mid June and has rallied for eight consecutive weeks to close the overextension relative to the 200-day MA. A break in the short-term progression of higher reaction lows would be required to check the current rally. If recovery potential is to be given the benefit of the doubt, support will need to be found above the June lows near €12 on the next substantial pullback.

Tenaris (1.75%) found support above the October low from June has rallied for the last 7 consecutive weeks. The share is becoming increasingly overextended in the short-term but a sustained move below the June lows near €12 would be required to question medium-term scope for additional higher to lateral ranging.

Following a steep decline over the last 18-months, Allegheny Technologies has been ranging in the region of $27 since June. It firmed from the side over the last three weeks but will need to sustain a breakout from the current range to suggest more than a temporary return to demand dominance.

Posco (2.47%) retested the June low at the end of last month and has rallied to test the region of the 200-day MA. A sustained move above KRW40000 would be required to break the medium-term progression of lower rally highs and indicate a return to demand dominance beyond the short term.

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