Clariant Lifts '10 Outlook Amid Sharp Rise In 3Q Net Profit

Clariant AG (CLN.VX) Wednesday lifted full-year guidance for the third time this year after quarterly net profit rose fivefold, but cautioned of a seasonally weaker fourth quarter.

The Muttenz-based maker of chemical ingredients for products ranging from clothing to cars said it now targets a margin on earnings before interest, tax and exceptional factors of more than 9% for 2010, from 8% previously. Clariant also targets high single-digit sales growth for the year, in local currencies.

"Clariant expects trading conditions to remain stable for the remainder of the year. In addition, raw material costs are expected to rise further but at a lower pace than in the first nine months of the year," the company said in a statement.

Clariant's net profit for the quarter surged to 106 million Swiss francs ($108.2 million), from CHF20 million in the year-ago quarter. This easily beat a consensus of 14 analysts provided by the company and compiled by Vara Research, which saw net profit of CHF37 million.

Revenue rose 1.2% to CHF1.71 billion, helped by more mature markets like Europe and U.S. catching up, following a slide in demand amid the financial crisis.

Under Chief Executive Hariolf Kottmann, Clariant has slashed spending, closed plants and let go more than 14% of its work force as part of a restructuring drive to bolster profitability.

The stock has risen 36% so far this year, outpacing a 15% rise in the Stoxx Europe 600 chemical index as investors bet on Kottmann being able to step up the pace of restructuring. Tuesday, the shares closed at CHF16.66, giving the company a market capitalization of $3.85 billion.

Before Clariant, rival BASF SE (BAS.XE) pleased investors by also lifting full-year guidance, after the traditional summer slump in business failed to materialize amid strong demand and tight supply.

-By Katharina Bart, Dow Jones Newswires; +41 43 443 8043; katharina.bart@dowjones.com

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