Thyssenkrupp Shares Fall on Fresh Profit Warning
November 09 2018 - 4:09AM
Dow Jones News
By Nathan Allen
Thyssenkrupp AG (TKA.XE) trades sharply lower Friday morning
after the company issued its second profit warning since July,
citing the need to book provisions against the outcome of an
investigation into alleged cartel activity.
The steel and technology group cut its 2018 net profit forecast
to 0.1 billion euros ($114.1 million) from a previous estimate that
net income would be "significantly better" than the prior year's
result of EUR271 million.
Thyssenkrupp also lowered its outlook for adjusted earnings
before interest and taxes to EUR1.6 billion from its earlier
projection of EUR1.8 billion.
0837 GMT Thyssenkrupp was trading 7.8% lower at EUR17.57
The company had already disclosed it was the subject of an
investigation into alleged cartel activity relating to the pricing
of heavy plate and flat carbon steel products, but hadn't warned of
any financial fallout.
On Thursday the group said it had decided to take out risk
provisions due to new developments in the investigation
process.
"This news is clearly negative for TKA but does not come as a
complete surprise following cautious recent commentary," Jefferies
analyst Seth Rosenfeld said.
Thyssenkrupp also said unspecified quality issues at its
automotive and industrial components business, lower-than-expected
earnings at its elevator unit and shipping restrictions at its
steel business contributed to the guidance cut.
Mr. Rosenfeld said production and shipping issues with the steel
business, due to low water levels on the River Rhine and reduced
automotive demand, likely accounted for more than half of the
hit.
Write to Nathan Allen at nathan.allen@dowjones.com
(END) Dow Jones Newswires
November 09, 2018 03:54 ET (08:54 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
Thyssenkrupp (PK) (USOTC:TKAMY)
Historical Stock Chart
From May 2024 to Jun 2024
Thyssenkrupp (PK) (USOTC:TKAMY)
Historical Stock Chart
From Jun 2023 to Jun 2024