HEIDELBERG MATERIALS AG 
FRANKFURT (Reuters) - Germany's HeidelbergCement (>> HeidelbergCement) reported flat second-quarter sales and a slight drop in earnings, missing expectations, which it blamed on the timing of religious holidays and poor weather that hampered construction.
HeidelbergCement's biggest market by capacity, Indonesia, celebrated Eid in late June, while the Easter holiday marked in the United States among other places fell in the second quarter instead of the first in 2017.
"Growth in sales volumes was impaired by fewer working days due to Easter and the end of Ramadan as well as rainy weather, especially in the South, Northeast and Midwest of the USA," HeidelbergCement said in a statement on Tuesday.
The world's biggest maker of aggregates used in concrete and the second-biggest maker of cement said price increases had almost been able to offset these factors.
HeidelbergCement shares were indicated to open 2.3 percent lower in Frankfurt, at the bottom of the blue-chip DAX <.GDAXI>.
"Disappointing as expectations already came down in last quarters. So FY17 guidance will become increasingly challenging," a Frankfurt-based trader wrote in a note.
HeidelbergCement confirmed its full-year outlook for a moderate increase in sales and a mid-single to double-digit rise in operating profit on a pro forma basis, not including its acquisition of ItalCementi.
"We have seen a clear upward trend since Easter and expect a significantly stronger development in the second half of the year," Chief Executive Bernd Scheifele said, pointing to stable economic development in the industrial countries where HeidelbergCement makes more than 60 percent of its sales.
Homebuilding in the United States, HeidelbergCement's second-biggest market, surged to a four-month high in June but construction activity remains constrained by rising lumber prices and labour and land shortages.
Cement sales in Indonesia are picking up due to increased investment in infrastructure projects, but overcapacity will continue to limit improvements in cement producers' profitability, Fitch Ratings said on June 14.
LafargeHolcim (>> LafargeHolcim), the world's biggest cement maker, cut its forecast for global demand last week, citing weakness in Southeast Asia and Nigeria.
The Franco-Swiss company said it still expects to increase core operating profit at a double-digit rate this year - faster than HeidelbergCement forecasts for itself.
HeidelbergCement's quarterly operating earnings before depreciation and amortisation slipped 1 percent on a like-for-like basis to 964 million euros ($1.14 billion), missing the average estimate of 985 million euros in a Reuters poll.
Sales were 4.61 billion euros, also missing the average forecast, which was for 4.68 billion euros.
($1 = 0.8452 euros)
(Reporting by Georgina Prodhan; Editing by Maria Sheahan and Louise Heavens)
By Georgina Prodhan
