Cemex posts surprise profit, sends stock to 8-month high

Mexico's Cemex reported an unexpected US$35 million profit in the first quarter of 2016, following a loss of US$149 million in the same period a year earlier, helped by increased sales in the United States.

Analysts surveyed by Reuters had expected Cemex, one of the world's largest cement producers, to report a net loss of US$30 million in the quarter.

In the United States, its leading market, Cemex said net sales rose 6 percent to US$920 million, aided by a pickup in residential and infrastructure construction as well as better weather than a year earlier.

The better-than-expected results helped send Cemex shares to an eight-month intraday high of 13.540 pesos on the Mexican stock exchange. The stock was last trading up 2.4 percent on the day at 13.380 pesos.

The Monterrey-based company, which has been selling assets to cut debt, reported a 3 percent fall in consolidated net sales to US$3.2 billion.

Cemex reiterated its guidance in February that it was targeting a total debt reduction of up to US$2 billion by 2017. In a presentation, Cemex said it saw asset divestments worth US$1 billion to US$1.5 billion by 2017.

The company lowered its 2016 total capital expenditure to US$650 million from the US$700 million seen in February. Cemex added it expected to raise its free cash flow for the year by US$400 million to US$450 million, up from a previous estimate of a US$350 million increase.

Cemex's earnings before interest, tax, depreciation and amortization were US$583 million, its best such quarterly result since 2009.

It added that on a like-for-like basis, taking into account ongoing operations and foreign exchange fluctuations, its global sales rose 3 percent.