TNT profit dips further

       TNT, Europe's second largest mail and delivery company, beat quarterly profit forecasts thanks to cost cuts, and said it saw early signs of recovery at its Express unit, although mail volumes remain weak.
       The Dutch logistics company which,like Britain's Royal Mail and Germany's Deutsche Post, has been battling to restructure its domestic mail operations,posted a 14.4% drop in operating profit in the third quarter, its fifth consecutive quarterly slump in earnings. However,the cost cuts meant operating margins stabilised compared with last year.
       "In this quarter the trading environment has stabilised further, with some early signs of positive underlying developments," chief executive Peter Bakker said in a statement.
       "TNT in the third quarter has delivered clearly better than expected results, primarily thanks to a solid execution of its cost savings plans," Petercam analyst Thijs Berkelder said in a note.
       "The first four weeks of the fourth quarter show a trend of improvement in the volumes of its express business,however volumes in its mail division are expected to fall at an increased rate,"TNT said.
       The company has been trying for several quarters to improve the profitability of its Express business while attempting to slim down its Dutch mail unit.
       Its earnings before interest and tax (EBIT) were 179 million ($263.8 million)on sales of 2.48 billion, down 7.6% yearon -year. Analysts were expecting EBIT of 159 million on revenues of 2.48 billion, according to a Reuters poll.
       TNT's main focus is on keeping unions at bay to avoid painful strikes of the kind that have paralysed British peer Royal Mail, while hoping that it has left the recession behind and that the economic recovery is sustainable.
       Like many competitors TNT has been struggling to cope with falling consumer demand while coming to terms with the liberalisation of the mail market.
       After seeing the operating margin in its Express division drop to 2% in the second quarter from 8.9% a year earlier,TNT posted a margin of 5.1% in the third quarter, on par with a 6% margin a year earlier.
       The company achieved this by removing 128 million from its cost base during the quarter.