Kontron AG fell to the lowest level in almost nine years in Frankfurt trading after the German maker of embedded computer boards said it will probably fail to meet its full-year targets as Europe’s debt crisis damps orders.
Kontron, which is based in Eching, dropped as much as 14 percent to 4.13 euros, the lowest intraday level since August 2003. The shares traded at 4.14 euros as of 12:48 p.m. Kontron was the biggest decliner on the HDAX Index of the 110 most highly capitalized stocks traded on the Frankfurt exchange.
Second-quarter revenue of 138.3 million euros ($167 million) fell short of the 143.8 million-euro average estimate of four analysts surveyed by Bloomberg. Net income slid 70 percent to 2.3 million euros compared with 7.7 million euros a year earlier. The reduced 2012 forecast came two weeks after Chief Executive Officer Ulrich Gehrmann confirmed the company’s forecast for the second quarter.
“Only two weeks ago, Kontron’s CEO said the company would reach its targets and now they’re reporting these very weak figures,” Marco Guenther, a Hamburg-based analyst at Hamburger Sparkasse, said in a phone interview today. “This breach of investors’ confidence is the main reason for the stock crashing today.”
Austerity measures in response to Europe’s debt crisis are fueling a reduction in spending by Kontron’s public-sector clients, hurting the company’s order book, Kontron said in its second-quarter report.
The company will “prospectively fail to attain its full-year 2012 targets due to current imponderables relating to the world economy, and continued prevailing uncertainties on many target markets, which are accompanied by an increase in competitive intensity,” it said in a statement.
Kontron is negotiating the sale of AP Parpro Inc., a wholly-owned subsidiary of Kontron America Inc., as part of a share deal to be finalized in the third quarter, the company said, without identifying the potential buyer.
The company said it’s conducting a review of product lines and markets as it seeks to boost profitability.