France's Saint-Gobain is set to post a 20.3% rise in 2007 net profit but investors are concerned at how the group that insulates one-in-five American homes will face up to the troubled US economy, analysts said. Saint-Gobain, the world's largest listed building materials group, earned a net profit of EUR 2BN for 2007, up from EUR 1.7BN in 2006. The net figure excludes capital gains or losses and a EUR 650M fund earmarked for antitrust fines from the EC. New CE Pierre Andre de Chalendar set targets in July 2007 for double-digit percentage growth in operating profit, at constant exchange rates, and growth of at least 20% in recurring net income. While 2007 results are unlikely to be a surprise, Saint-Gobain's outlook is critical, analysts said. "We believe management's message for 2008 will be a key stock driver", Deutsche Bank analyst Nabil Ahmed said. Saint-Gobain shares have fallen 21.4% in 2008, losing 14% in the third week of January, as fears of a US recession triggered a global equity sell-off Mr. de Chalendar told Reuters in October 2007 that a collapse in the US housing market had had a limited impact on Saint-Gobain's activity, otherwise boosted by strong demand in emerging markets and resilient construction activity in Europe. Mr. de Chalendar told French newspaper Les Echos in December 2007 he expected conditions in the US construction market to improve in 2009. But the trading environment has continued to deteriorate, with US home building projects started in December 2007 down to their lowest level in more than 16 years, while permits for future building dropped to a 14-year low. In Europe, after a strong final quarter in 2007, markets are now seeing signs of a tougher housing environment in 2008.
