CSR outlook below forecasts- shares slide

MELBOURNE, July 10 (Reuters) - Australian conglomerate CSR Ltd (ASX: CSR.ax) said on Thursday it expected group earnings to rise over 5 percent in its current fiscal year, well below analysts' forecasts and knocking its shares down 15 percent.

CSR's latest forecast for earnings before interest and tax (EBIT) fell some way short of market expectations for EBIT growth of 13.8 percent to A$439.6 million ($419 million), according to Estimates.

CSR said earnings in its key building products and sugar units would both be higher than the previous year as it worked to offset higher costs.

"Some of our core business sectors, such as housing, continue to be challenging. We are seeing clear signs of interest rate stress and loss of consumer confidence," CSR Chairman Ian Blackburne told shareholders at the group's annual meeting.

The company's shares slumped to a four-year low of A$1.97 and last traded down 13 percent at A$2.02 in a broader market JO down 1.7 percent.

The company said in May it did not expect to break itself up in the near-term.

Instead it was focusing on growing its new glass business, Viridian, and capturing growth in demand for renewable energy, which it can supply with ethanol from sugar and co-generation from its plants where it uses biomass for fuel. ($1=A$1.05) (Reporting by Sonali Paul; Editing by James Thornhill)

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Thu 10th July 2008 - 10:47am