Analysts are predicting that BASF, the German chemical company, will report third-quarter sales of €17.58 billion ($18.57 billion), based on consensus estimates provided by the company. This figure would be a decrease from the €21.95 billion achieved in the same quarter last year.
Net Profit Forecast
BASF is expected to report a net profit of €282 million for the quarter, according to the consensus estimate. This is significantly lower than the €909 million reported in the third quarter of the previous year.
Key Points to Watch
Demand & Recovery
UBS analysts highlight weak demand, decreased volumes, and declining prices as factors that are likely to impact BASF’s earnings in the quarter. The company’s recovery outlook will be closely monitored, particularly regarding its materials and chemicals divisions, as soft demand and prices are expected to have an adverse effect on both.
Warburg Research analyst Oliver Schwarz also emphasizes the potential impact of high energy and personnel costs, as well as increased unit costs, on BASF’s earnings. Lower demand in the quarter may have led to reduced capacity utilization, which could further drive up costs.
Citi analyst Ranulf Orr points out that Europe is expected to be a significant drag on BASF’s performance in the quarter. Most end markets, including the previously strong automotive sector, are stagnating, indicating a broader slowdown.
In July, BASF revised its guidance for 2023 sales to a range of between €73 billion and €76 billion. The company also adjusted its EBIT (earnings before interest and taxes) guidance before special items to a range of between €4 billion and €4.4 billion. However, Jefferies analysts Charlie Bentley and Chris Counihan believe that the challenges faced by the sector make it increasingly unlikely for BASF to achieve its 2023 guidance.
Warburg Research’s Oliver Schwarz expects BASF to achieve the lower end of its EBIT guidance range.
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