BASFY BASF SE (QX)

--BASF's first-quarter earnings dropped, but beat consensus estimates

--Downstream specialty units outperformed the upstream commodity business

--Subdued market sentiment weighed on demand, particularly from autos

 
   By Nathan Allen 
 

BASF SE's (BAS.XE) first-quarter profit dropped as global trade tensions and a slowdown in the auto industry continued to take their toll, the company said Friday.

The German chemical maker said net profit fell to 1.41 billion euros ($1.58 billion) from EUR1.68 billion a year earlier, but beat a consensus forecast of EUR1.27 billion.

Sales ticked up to EUR16.18 billion from EUR15.70 billion, the company said.

BASF's specialty-chemical businesses outperformed its upstream units, where margins on commodity chemicals weakened from exceptionally high levels a year earlier.

Price increases in the specialty units weren't enough to compensate for the upstream slowdown, leading to a 2% decline in average prices, the company said.

BASF had already warned that 2019 would be a transitional year as it rolls out a new divisional structure and integrates several agricultural businesses it bought from rival Bayer AG (BAYN.XE) last year.

External factors also played a part in the weaker results. BASF pointed to global economic instability and subdued market sentiment, which weighed on demand--particularly from the autos sector--as customers chose to hold off on big orders.

"Owing to the overall cautious ordering behavior of customers, sales volumes at the BASF Group were down by 4%," the company said.

Still, the company stuck to its 2019 guidance for slight sales growth and slightly higher earnings before interest and taxes before special items, suggesting that it is more optimistic for the second half.

Write to Nathan Allen at nathan.allen@dowjones.com

(END) Dow Jones Newswires

May 03, 2019 02:10 ET (06:10 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.