Deutsche Post to Buy Back Up to EUR1 Billion of Own Stock --Update

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By William Wilkes

FRANKFURT--Deutsche Post AG shares jumped Tuesday after the company said it would buy back up to 1 billion euros ($1.1 billion) worth of its own stock and confirmed targets for this year and 2020.

The German logistics company, which is set to report 2015 results Wednesday, said the repurchased shares would either be cancelled or used to meet other obligations. The firm said the repurchase "is to be seen against the background of the strong free cash-flow generation."

Deutsche Post also said it had met its minimum goal for earnings before interest and taxes of EUR2.4 billion last year, a target it had lowered in late October. For 2016, Deutsche Post has said it expects EBIT of between EUR3.4 billion and EUR3.7 billion, and forecast that operating profit would increase by an average of more than 8% annually through 2020.

The firm's shares rose as much 6% to EUR24.08 shortly after the afternoon announcement, leading the DAX index, which was lower most of Tuesday.

Deutsche Post endured a tough 2015. Third-quarter net profit fell substantially due to impairments on an information technology project, despite rising revenue. The firm also faced costs related to strikes and the post and parcel delivery group's reorganization earlier in the year.

For 2015, analysts expect Deutsche Post to report fourth-quarter EBIT of EUR951 million, which would mark a 5.1% increase from a year earlier, helped by strong performance in its PeP division, which includes post, e-commerce and parcel services.

Write to William Wilkes at william.wilkes@wsj.com

(END) Dow Jones Newswires

March 08, 2016 10:45 ET (15:45 GMT)

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