Osram Licht AG (OSR) fell the most since the shares began trading in July after the world’s second-biggest lighting company cut its revenue target amid slowing sales of traditional lightbulbs.
Revenue will remain flat or at best increase moderately, while adjusted earnings before interest, taxes and amortization will still represent at least 8 percent of sales, the Munich-based company said in an e-mailed statement. The shares fell as much as 10 percent.
“Reaching sales growth expectation in 2015 could be challenging if the traditional business will continue to decline at the current rate,” Guenther Hollfelder, an Unterschleissheim, Germany-based Baader Bank analyst who rates Osram hold, said in a note to clients. “This could also trigger new restructuring measures, which are expected to decrease to a normalized level from 2015.”
Osram was spun off last year from Siemens AG, Europe’s largest engineering company, amid a shift in the lighting industry toward light-emitting diodes, which are smaller, more energy-efficient and have longer lifespans than traditional bulbs. That’s prompting Osram and its larger Amsterdam-based competitor Royal Philips NV (PHIA) to adapt their business models with options such as service contracts in order to stabilize revenue.
The shares were down 7.6 percent at 37.01 euros as of 10:18 a.m. in Frankfurt, valuing the company at 3.9 billion euros ($5.3 billion) and taking the decline to 9.7 percent this year.
Even as sales of traditional products declined 7.1 percent in the second quarter from the previous year, they still accounted for 66 percent of revenue from the core lamps and components division in the second quarter, Osram said May 5. The company had already said April 30 that the full-year sales growth target of about 3 percent had become more challenging.
Osram reiterated yesterday that it expects net income to rise sharply this year.
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