RWE leads German advancers despite a 45% plunge in 2011 profit
Despite reporting a plunge in 2011 profits and missing consensus sales estimates, investors seem to be reacting favourably to promises of future stabilization, so that RWE is now leading what gains are to be found in the DAX30.
The German utility reported a 45.4% dive in fiscal 2011 profit to €1.81bn or €3.35 per share. Recurring net income also fell 34% to €2.48bn while revenues dropped 3.1% to €51.69bn.
Analysts had expected net profit of €2.11bn on sales of €52.65bn.
Nonetheless, chief exec Jürgen Grossman assured investors that measures were already in place that would improve future earnings and that he expects profits to remain flat for 2012 and 2013 as he sells off assets after Germany’s decision to get rid of nuclear power.
"We have introduced the necessary measures to get us through the trough quickly," Grossman said.
Investors appear to be taking his comments at face value as RWE leads the gains on the DAX, shooting up 3.32% to €35.64.