Dutch-Belgian financial services group Fortis today cut its full-year profit forecast and posted third-quarter earnings below expectations.
Fortis, whose stock has fallen about 17 per cent this year, said it now saw operational earnings per share growing by only 5 per cent this year, instead of the 12 per cent previously expected, due to the ongoing slowdown in the world economy.
The group reported a 2 per cent fall in the much-watched operating EPS in the first nine months to euro 1.60, which implies a third-quarter figure of euro 0.41, well below market consensus expectations for euro 0.48.
When Fortis reported better-than-expected six-month results in August, it said it would achieve a 12 per cent increase this year in operational EPS. But this was provided stock markets or the economy did not deteriorate further.
The September 11th attacks in the US shattered this hope and threw already pressured world markets into further disarray.
Investors fled volatile stock markets with variable returns and into investments that offer guarantees. Merger and acquisition activity has slowed to almost nothing.
Owing to the ongoing slowdown in the world economy and the weakness in financial markets, income from stock-market related business activities was lower than expected, Fortis said.
Moreover, net capital gains will fall about euro 170 million short of the figure foreseen for 2001, the company said in a statement.