Mexico's Vitro Q3 earnings seen weak on economy

Glassmaker Grupo Vitro is seen reporting weak third quarter earnings compared with the same quarter last year, due to weak economies in Mexico and the U.

S. and because the company sold off its pharmaceutical and appliance divisions in the past year.The average forecast in a Reuters survey of four analysts who cover Vitro was for a 6.2 percent fall in earnings before interest, taxes, depreciation and amortization (EBITDA) in the July-September period, compared with the same quarter last year.The poll also forecast a 20 percent drop in sales and a 7.7 percent fall in operating profit for a Monterrey, Mexico-based firm which makes flat glass for the automotive and construction industries, as well as glassware.Both Mexico and the United States are slowly recovering from economic recessions last year, and the weak economies have depressed demand for Vitro's products, analysts said.However, analysts said they saw Vitro's sales falling only 3.08 percent when comparing the third quarter with the second quarter, which they said made more sense given that the company has shed some units over the past year.The poll did not yield a consensus forecast for net income because analysts said it was tough to gauge whether the 2.44 percent depreciation of the Mexican peso versus the U.S. dollar during the quarter would have a positive or negative effect on the company.Some 48 percent of Vitro's sales are in dollars.Vitro plans to report third quarter results on Oct. 24.The following table compares the average forecast with inflation-adjusted results from the third quarter of 2001. All numbers in pesos except for earnings per American Depositary Receipt (ADR), which are in dollars.

600450 Mexico's Vitro Q3 earnings seen weak on economy glassonweb.com
Date: 24 October 2002
Source: Forbes

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