(Adds analyst quote, updates shares)
By Sitaraman Shankar
FRANKFURT, May 21 (Reuters) - SGL Carbon , the world's biggest producer of graphite electrodes, indicated on Wednesday it may miss its 2003 operating profit target unless the dollar firms up against the euro, sending its shares tumbling.
"Sixty to seventy million euros is still something we should aim for, based on (a dollar-euro rate of) 1.10 to 1.15," Chief Executive Robert Koehler told Reuters on the sidelines of an investor conference. The dollar weakened to 1.17 against the euro on Wednesday.
The German company said in April it was comfortable with analysts' operating profit estimates of 60 to 70 million euros for this year.
"Koehler's comments seem to suggest that SGL perhaps will not reach its profit targets," said an analyst. "He bases his outlook on a euro-dollar rate and we're already above that."
Koehler said a 10 percent fall in the dollar would result in a drop in operating profit of 10 to 13 million euros ($12-$15 million) from last year.
SGL shares were down 12.5 percent at 11.75 euros by 1410 GMT, strongly underperforming the MDAX mid-cap index, which was down 1.4 percent.
Earlier this month the company posted a five-fold rise in first-quarter operating profit as a result of buoyant sales and cost cuts and predicted a stronger second quarter.
Koehler said he expected the company to do better in the second quarter in carbon graphites than in the traditionally strong fourth quarter last year and that it expected graphite volumes of 50,000 tonnes or more in the second quarter.
He said the improvement in the second quarter would not be dramatic, however. "The major profit contribution comes in the second half," he said.
"We expect prices to be up three to five percent excluding currency movements (in the second quarter)."
The company's graphite electrodes are used in steelmaking, while its composite materials are used in other industrial applications, such as brake discs in cars.