Makhteshim Agan Industries Ltd. (TASE: MAIN) today predicts a net profit of $14-20 million on $465-485 million revenue for the fourth quarter, compared with a net loss of $39 million on $419 million for the corresponding quarter of 2006. The net profit figure is less than the $30 million market consensus.
The announcement sent the share into freefall: it was down 16.5% by early afternoon on the largest turnover on the market. Makhteshim Agan's parent company, Koor Industries Ltd. (TASE:KOR), is down 17.7%, and its parent company, Discount Investment Corporation (TASE: DISI), is down 2.7%.
Makhteshim Agan it predicts a net profit of $172-178 million on $2.07-2.09 billion revenue in 2007, compared with a net profit of $84 million on $1.78 billion in 2006.
The announcement came on the same day that UBS gave the company an enthusiastic recommendation. UBS raised its target price for the share to NIS 42 from NIS 37.
Last month, Lehman Brothers predicted that Makhteshim Agan would report a net profit of $186 million for the year; the company's guidance is 7.5% below this forecast.
Today's forecast nevertheless represents substantial improvement on Makhteshim Agan's results for the fourth quarter of 2006 and the year as whole. The fourth quarter 2007 revenue guidance is 11% higher than the company's revenue for the corresponding quarter of 2006, when the company also posted a heavy loss. However, the fourth quarter of 2006 was not a normal quarter: Makhteshim Agan made heavy-writes at the time. It was also the quarter when Avraham Bigger was appointed CEO.
Published by Globes [online], Israel business news - www.globes-online.com - on January 10, 2008
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