BASF AG, the world's biggest chemical producer, said third-quarter profit doubled and it raised its forecast for 2007 after more than US$8 billion in acquisitions and a tax gain in Germany.
Net income rose to 1.2 billion euros (US$1.7 billion), or 2.5 euros a share, from 613 million euros, or 1.22 euros, a year earlier, Bloomberg News reported.
Analysts surveyed by Bloomberg had estimated profit of 809.8 million euros (US$1.16 billion). BASF reported a 186 million-euro (US$266 million) gain after the introduction of new corporate tax laws.
Chief Executive Officer Juergen Hambrecht predicted record earnings this year. BASF made purchases to move away from chemicals such as ammonia toward engine coolants and higher-margin additives, where prices have risen as much as 20 percent. The Ludwigshafen, Germany-based company bought Engelhard Corp, the US inventor of the catalytic converter, for US$4.8 billion.
"The first nine months have been so extraordinarily good that even a bad fourth quarter couldn't spoil it," said Oliver Schwarz, a Frankfurt-based analyst at Equinet AG, who rates the shares "buy."
BASF stock declined 73 cents, or 0.7 percent, to 97.61 euros in Frankfurt trading as of 9:19am yesterday. The stock has advanced 33 percent since Janurary 1, outpacing the Bloomberg Europe Chemicals Index's 22 percent gain. Dow Chemical Co, the largest US chemicals maker, added 13 percent. BASF, the No. 1 by sales, has a market value of 48.1 billion euros (US$69 billion).
Revenue increased 5 percent to 14 billion euros (US$20 billion).
BASF forecast earnings before interest and taxes will rise. The company had previously said profit would at least match that of 2006. Ebit before special items totaled 7.23 billion euros (US$10.3 billion) last year. It predicted annual sales of almost 58 billion euros (US$83 billion), up from 52.6 billion euros (US$75.5 billion).
Products range from glue and fertilizers to vitamins used in nutrition, plastics and detergents. Its chemicals can be found in shampoo, airbags and diapers. German sporting-goods maker Adidas AG uses the company's materials to make cushioning for sneakers.
The agricultural and nutrition unit posted the strongest sales growth in the third quarter, boosted by price increases for products such as fungicides for soybean cultivation in South America, as well as higher demand.
The chemicals maker in March signed a US$1.5 billion joint venture with Monsanto Co of the US to develop genetically modified seeds and tap demand for higher-yielding and drought-resistant crops. Planting of its GM potato, known as Amflora, may be approved by the European Commission within weeks.