- Third-quarter earnings, sales miss analyst estimates
- Share price declines as much as 6.6%, most in 10 weeks
Fuchs Petrolub SE, the world’s largest independent lubricants supplier, dropped the most in 10 weeks in Frankfurt trading after saying it will only meet this year’s targets with the help of acquisitions and favorable currency moves.
Earnings before interest and tax will grow by a “higher single-digit” amount this year, Fuchs reiterated Tuesday. Analysts had expected the company to lift its goal, and the preferred stock dropped as much as 6.6 percent, the steepest intraday decline since Aug. 24.
“This is a surprise,” Martin Roediger, an analyst at Kepler Cheuvreux, said in a note to clients. “The unchanged outlook might weigh on the share price performance.”
Organic sales at Fuchs will remain at the same level or increase “slightly,” it said. Heightened competition from emerging-market rivals as well as new entrants such as Cosan SA of Brazil are prompting consolidation in the European market.
The shares, rated hold by Roediger, traded 6.3 percent lower at 42 euros as of 9:08 a.m. local time. Kepler’s Roediger and Uwe Schupp at Deutsche Bank had expected the company to increase its target to a “low double-digit” amount, according to notes published before Fuchs Petrolub’s Tuesday statement.
The global lubricants industry will stagnate this year, Mannheim, Germany-based Fuchs said. It had earlier predicted expansion of 0.5 percent .
Chief Executive Officer Stefan Fuchs has said he’s still on the lookout for acquisitions after buying Deutsche Pentosin-Werke GmbH and Statoil Fuel & Retail Lubricants AB earlier this year.
Third-quarter earnings before interest and tax gained 5.4 percent to 89.3 million euros ($98.5 million), Fuchs said. Analysts had predicted 93.9 million euros, according to a Bloomberg survey. Sales rose 9.9 percent to 531.2 million euros.
“Organic growth in sales revenues weakened over the course of the year due to market conditions,” the CEO said Tuesday in the company’s quarterly report. The company’s earnings and sales forecast takes into account “a weak euro and the contributions from external growth.”
The Fuchs founding family owns a majority stake in the German company.