PREVIEW-Cemex seen posting weak net, US sales may pick up

* WHAT: Cemex Q2 results

* WHEN: Tuesday, July 27

* REUTERS FORECAST: Net profit drop of 55 pct

By Gabriela Lopez

MONTERREY, Mexico, July 23 (BestGrowthStock) – Mexico’s Cemex is
seen posting a 55 percent fall in second-quarter profit (Read more your timing to make a profit.) to $84
million but results could show crucial signs of a pick-up in
U.S. sales volumes, according to a Reuters poll.

Cemex (CX.N: ) (CMXCPO.MX: ), the world’s No. 3 cement maker,
reported a profit of $187 million in the April-June period of
last year.

“While we expect Cemex to report another weak quarter …
for the first time in several quarters U.S. cement volumes
should grow on a year-to-year basis by an estimated 8 to 10
percent,” said Bank of America Merrill Lynch in a report.

Investors in Monterrey-based Cemex, which competes with
Switzerland’s Holcim (HOLN.VX: ) and France’s Lafarge (LAFP.PA: ),
are anxious to see an improvement in volumes in the company’s
biggest market, the United States, following a very tough 2009
in which the company came close to defaulting on its debt.

Cemex bought Australian rival Rinker in 2007, which had 80
percent of its operations in the United States, just as the
U.S. housing crisis broke and the global recession ensued.

A likely $84 million profit in the second quarter still
compares favorably with the previous two quarters, when Cemex
reported a net loss from its operations in more than 50

According to seven analysts polled by Reuters, Cemex’s
revenue will have probably fallen 11 percent in the quarter,
hurt by weak demand in Spain and Mexico, two major markets for
the company, overshadowing signs of life in the United States.

Lower sales volumes and the weak Mexican peso and euro
versus the U.S. dollar, Cemex’s reporting currency, will also
have likely hit the company despite a drive to cut costs. The
Mexican peso lost 4.3 percent of its value in the quarter.

Cemex is expected to report before the market opens on July
27 and will probably adjust its 2009 numbers to reflect the
sale of its Australian assets in October last year. Following
is a table with the average expected results for the cement
maker. The 2009 figures include Australian operations.


2010 2009 CHANGE
Revenue $3.721 bln $4.188 bln -11.1 pct
EBITDA* $645 mln $812 mln -20.6 pct
EBITDA margin 17.33 pct 19.39 pct -206 bps**
Operating profit $276 mln $411 mln -32.8 pct
Operating margin 7.42 pct 9.81 pct -239 bps
Net profit $84 mln $187 mln -55.1 pct

* Earnings before interest, tax, depreciation and

** basis points

Stock Market Advice

($1=12.94 pesos as end-June)

PREVIEW-Cemex seen posting weak net, US sales may pick up