Fuchs Declines as Low U.S. Demand Hurts Profit: Frankfurt Mover

Fuchs Petrolub AG, the world’s largest independent lubricant maker, dropped as much as 5.2 percent in Frankfurt trading after weak demand in the U.S. led to lower-than-expected quarterly earnings.

The preferred stock fell as much as 3.31 euros to 60.68 euros. Earnings before interest and taxes gained 1.2 percent to 73.4 million euros ($97 million) in the first quarter, the Mannheim, Germany-based company said today in a statement. Analysts had predicted 77.4 million euros, according to a Bloomberg survey.

Fuchs said today it is sticking to a full-year target to increase earnings and sales even though revenue in North and South America declined 4.2 percent in the first three months. The forecast is based on organic growth in Europe, Asia-Pacific and Africa, it said. The lubricant maker is also building new factories in Kaluga, Russia and Yingkou, China.

“The biggest negative surprise for us came out of the Americas,” John Philipp Klein, an analyst at Berenberg Bank, wrote in a note to clients. “Weak demand from industrial customers” led to a decline in sales and in profitability.

The shares were trading down 2.9 percent at 62.13 euros as of 9:58 a.m. local time. Fuchs has gained 11 percent this year, boosting the company’s market value to 4.2 billion euros.

First-quarter sales fell 1.4 percent to 442 million euros, missing a 461.4 million-euro analyst estimate. Net income was little changed at 51.5 million euros, also missing predictions.

Chief Executive Officer Stefan Fuchs has said he is seeking acquisitions to boost this year’s revenue increase beyond the “low single-digit percentage range” that is forecast for organic growth.

The Fuchs family owns a majority stake in the company.

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