UPDATE 3-AkzoNobel Q3 misses forecast, looks to emerging mkt

* EBITDA 574 mln euros, vs Reuters poll 587 mln euros

* Sales up 13 pct to 3.9 bln euros, vs poll 3.8 bln euros

* AkzoNobel shares down 1.9 pct to 43.78 euros

* STOXX Europe 600 Chemicals index up 0.2 pct

(Adds analyst comment, shares, detail)

By Aaron Gray-Block

AMSTERDAM, Oct 21 (BestGrowthStock) – Dutch chemical group AkzoNobel
(AKZO.AS: ) pinned its hopes on emerging markets when posting a
lower than expected rise in quarterly core profit and said it
was cautious over housing and construction in mature markets.

The maker of coatings for laptops, houses, planes and ships
said building markets, especially in developed markets, remained
soft, but evidence of sustained industrial demand beyond
restocking gave it reason for cautious optimism.

“Mature markets show no early signs of recovery and our
expectation is that these headwinds will remain for some time,”
Chief Financial Officer Keith Nichols told reporters.

However, AkzoNobel said it was “particularly optimistic”
about strong revenue gains in high-growth markets, which
accounted for 37 percent of revenue in 2009 and have
above-average margins.

Although the company was seeing “encouraging volumes”, gross
domestic product growth in advanced economies was expected to
remain in the low single digits, lagging growth seen prior to
the crisis, Nichols said. The company still expected prices for
raw materials to rise about 5 percent for the year.

AkzoNobel is mainly active in the premium paints market in
China, and CFO Nichols said it would increasingly focus on
winning market share in the mid-market segment.

DZ Bank analyst Peter Spengler said AkzoNobel’s results were
“disappointing but not really surprising”. He said it appeared
AkzoNobel “is still not participating in the China growth
story”, as he kept his negative view on the stock.

Rabo Securities analyst Fabian Smeets described the
company’s results as being weak, despite positive currency
effects, and raised concern the firm has started to be hurt by
the cooling down of the real estate market in China.

Shares in AkzoNobel fell 1.9 percent to 43.78 euros by 0802
GMT, underperforming a 0.2 percent rise in the STOXX Europe 600
Chemicals (.SX4P: ) index.

SLOWING VOLUME GROWTH

AkzoNobel reiterated it was cautiously optimistic for 2010
after a 13 percent rise in third-quarter sales.

The world’s biggest paint company reported a 9 percent rise
in third-quarter earnings before interest, tax, depreciation and
amortisation (EBITDA) excluding one-offs to 574 million euros
($790 million), below the average forecast of 587 million euros
from a Reuters poll of seven analysts.

Chemicals companies have posted strong results in recent
quarters on recovering demand and improved margins due to cost
cuts, but doubts still prevail over the strength of the rebound.

Global chemicals market leader BASF (BASFn.DE: ) beefed up its
full-year operating profit outlook on Wednesday thanks to a
strong third quarter but warned that the positive climate might
not continue next year. [ID:nLDE69J07L]

AkzoNobel, maker of household brands such as DuLux, Sikkens,
Flexa and Glidden, reported higher year-on-year volumes in the
past four quarters, but growth slowed again in the third
quarter, as it had in the second.

AkzoNobel has cut costs by close to 700 million euros since
2008 to achieve a targeted 14 percent EBITDA margin, and
analysts raised concerns about how it would cope with rising
petrochemical raw materials prices and slowing economic growth.

AkzoNobel’s U.S. rival PPG (PPG.N: ) reports its third-quarter
results later on Thursday, while Sherwin-Williams (SHW.N: ) comes
out with results on Tuesday.
(Additional reporting by Christoph Steitz; Editing by Sharon
Lindores)
($1=.7264 euros)

UPDATE 3-AkzoNobel Q3 misses forecast, looks to emerging mkt