TNT was complying with security steps after two parcel bombs on U.S.-bound planes were intercepted last week, its finance chief said, but he would not comment on costs to arise from new measures governments may take.
"We have restricted activities with regards to Yemen. We are sticking to all safety restrictions and the embargo," CFO Bernard Bot told a conference call with reporters.
"The question is what the governments will be doing now and then we'll also be on board, but I cannot be more specific than that."
TNT, which is separating its express and mail units and preparing the mail business for a possible sale, said cost savings in mail were insufficient to offset volume declines, price pressures and a rise in pension and other costs.
"The results were surprisingly bad in mail, which was going down (steadily) in terms of volumes. The operating result is way below consensus. In express, we expected higher operating income on such volumes," said Rabobank analyst Philip Scholte.
Faced with the rise of electronic communications and declining postal volumes, TNT has been trying to restructure its mail unit. Trade unions have threatened to strike over redundancies as TNT seeks to axe 11,000 jobs.
"This is the first year where we have full liberalisation in mail. But one quarter of the decline (in addressed mail volumes) is due to competition and three quarters are due to (electronic communication) substitution effects," Bot said.
TNT said it was on track for an internal separation of mail and express by Jan. 1 and that the preferred capital markets transaction to separate the equity of mail and express was in the process of final evaluation. Bot said the capital markets operation could be delayed if there was no union agreement.
Banking sources told Reuters on Friday that TNT was considering a capital increase and had asked banks to put forward proposals. The company plans to provide more details on the separation at its analyst day on Dec. 2.
It posted earnings before interest and tax (EBIT) of 143 million euros ($199.8 million) on revenues up 11.4 percent year-on-year to 2.766 billion. Analysts in a Reuters poll had projected EBIT of 169 million on revenues of 2.673 billion.
Good but not Great
"Business conditions in Q3 have generally followed the trends we experienced in the first half of the year -- good but not great -- with a continuation of the general recovery of activity levels held back by a difficult pricing environment," Chief Executive Peter Bakker said in a statement.
Air freight traffic -- a bellwether for global trade and economic activity -- lagged expectations in September, with volumes 6 percent below May's post-crisis peak.
In October, UPS, the world's largest package delivery company, beat quarterly profit forecasts and raised its full-year outlook, saying it expected modest holiday season growth in a slowly recovering U.S. economy.
TNT said traffic in express, which accounted for 54.5 percent of operating profit in the third quarter, rose both in terms of kilos carried and the number of consignments but that the yield in the division continued to be negative.
TNT has taken measures to improve profitability in express, such as increasing prices in Europe by an average 3.5 percent, but has warned the full effect would not be felt until 2011.
