Orco drops nearly 6 pct on disappointing results

PRAGUE, Nov 23 (Reuters) - Shares in real estate developer Orco Property Group <ORCO.PA> <ORCOsp.PR> fell nearly 6 percent on Thursday morning after its third-quarter net profit and revenues came in well below market expectations.

The stock traded 5.8 percent lower at 2,597 crowns by 1015 GMT on the Prague Stock Exchange. In Paris, it was 4.4 percent lower at 92.70 euros.

"These figures appear to be a big disaster," Czech Komercni Banka said in a report.

HSBC started coverage on the stock with an "underweight" rating and a price target of 2,247 crowns.

Orco's net profit totalled 22.92 million euros, less than half the average market estimate of 46.03 million euros. The Luxembourg-based company also cut its 2006 revenue forecast to 180 million euros from 200 million euros.

Analysts said the poor results dealt another blow to the stock which is also partly suffering from a planned initial public offering by another property company, ECM Group, on the Prague stock exchange next month.

But some analysts said the deep share price fall might draw investors back into the stock.

"The market was looking for an unrealistically high revaluation gain. Therefore we think any significant drop may create a good buying opportunity," said Robert Keller, analyst at Patria Finance.

"Overall we remain positive on Orco's business strategy and projects in the pipeline," he added. ((Reporting by Marek Petrus; editing by Paul Bolding; Reuters Messaging: rm://marek.petrus.reuters.com@reuters.net; e-mail: prague.newsroom@reuters.com or marek.petrus@reuters.com; Tel: +420 224 190 477))

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Keywords: PROPERTY CZECH ORCO