Linde tumbles after cutting 2017 profit forecast
Shares in Linde tumbled after the German industrial gases company cut its 2017 profit targets as it highlighted slowing production growth.
The company said late on Monday that it now expects group operating profit for 2017 to come in between €4.2bn and €4.5bn, down from a previous target of €4.5bn to €4.7bn.
Linde said overall conditions had changed substantially compared to October 2014 when the targets were defined.
The group said the growth rates of industrial production relevant for the industrial gases business have slowed significantly.
In addition, it said the state-controlled price reductions in the US healthcare market in 2016 and 2017 are expected to be stronger than originally assumed.
The company said its engineering division will contribute less to group operating profit than originally planned, mainly due to a lower order intake as a medium-term low oil price results in “investment hesitancy among customers”.
Linde said it now expects to achieve return on capital employed of between 9% and 10%, compared with previous guidance of 11% to 12%.
At 0900 GMT, Linde shares were down 11% to €147.10.