Deutsche Post AG (DPW.XE) Wednesday slashed its dividend proposal for 2008 after it swung to a net loss and lowered it 2009 adjusted earnings outlook.

The company proposed a 2008 dividend of EUR0.60 per share, below last year's level of EUR0.90 per share, pointing to a steepened drop in volumes in the first quarter, which it expects to continue "throughout the first half of the year, if not longer."

Deutsche Post cut its 2009 earnings outlook due to these slumping volumes and said it now expects adjusted earnings to fall this year compared with 2008 from a previous forecast of adjusted earnings before interest and taxes to rise on the year. However, it predicted that 2009 reported earnings would improve significantly in light of lower one-time charges compared with 2008.

"2009 will be a year of hardship for the entire logistics industry ... our focus will now be on costs and cash generation to help us through the difficult times ahead," Chief Executive Frank Appel said in a statement.

Deutsche Post competes with the likes of TNT NV (00906.AE), FedEx Corp. (FDX) and United Parcel Service Inc. (UPS). Those three also are focusing on cost reduction to deal with slacking shipping demand caused by a slumping global economy.

Deutsche Post, Bonn, Germany, also indicated it won't be able to provide a firm outlook for the year at all, after previously saying that it wouldn't give an outlook before the end of the first quarter.

Deutsche Post's net loss in the fourth quarter totaled EUR3.16 billion, as the world economic downturn further reduced demand for mail and logistics services. That quarterly deficit compared with the group's net profit of EUR253 million in the same 2007 quarter. A Dow Jones Newswires poll of 10 analysts had forecast a net loss of around EUR2.9 billion.

The company's results before interest and taxes came in at a loss of EUR2.7 billion compared with earnings before income and taxes of EUR450 million a year earlier. Analysts had expected an EBIT loss of EUR2.79 billion.

Sales for the fourth quarter fell 3.3% to EUR14.02 billion from EUR14.5 billion. This was slightly below analyst forecasts of EUR14.05 billion.

The former state monopoly had said Jan. 19 that it met its full-year target for adjusted EBIT of EUR2.4 billion.

For the full year, its closely watched reported EBIT dropped to a loss of EUR567 million. This includes one-off items related to restructuring of the U.S. express operations and markdowns of goodwill on intangible assets. These effects were offset by a payment from the German government after Deutsche Post won a European Court case on state aid.

For the full year, Deutsche Post said sales rose 0.8% to EUR54.47 billion from EUR54.04 billion. Its full-year net loss came in at EUR6.9 billion, from a net profit of EUR1.38 billion a year earlier.

Deutsche Post shares Wednesday closed at EUR8.36. The shares have lost more than 60% over the past 12 months, compared with the Dow Jones Euro Stoxx Industrial index which fell just over 50%.

Company Web site: www.dpwn.com

-By Hilde Arends, Dow Jones Newswires; +49 69 29725 506; hilde.arends@dowjones.com

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