Reuters reported that French nickel and manganese group Eramet has raised its outlook for second half operating profit to breakeven.

Mr Luc Pez analyst at Oddo Securities said that "The correction in the Eramet share price is more to do with the overall correction on the metals and mining sector rather than anything in particular that was in the Q3 release."

Eramet raised its second half guidance from a previous outlook for an operating loss and posted third quarter sales at EUR 637 million, above Oddo's forecast of EUR 550 million.

Nomura analysts also said that Eramet's performance beat their estimates, notably in manganese revenue, but they remained cautious about growth prospects, reiterating their 'neutral' rating following a downgrade from 'buy' a day earlier.

The group's third quarter sales were down 40% YoY but up slightly on the prior quarter, with Eramet citing an improvement in nickel and manganese markets from low first half levels, supported by governments' economic stimulus efforts and stock adjustments.

Eramet said that demand for nickel improved during the second and third quarters in view of a pick up in stainless steel production from very low levels at the start of the year. The group's nickel output reached 38,700 tonnes in the first 9 months of 2009, representing about 80% of capacity and in line with Eramet's target for 2009.

Eramet's alloys branch posted sales of EUR 157 million, down by 36% YoY and 21% QoQ, with steel tools and aeronautics particularly affected.

(Sourced from www.reuters.com)