Bechtle shares fall after weak third-quarter results and Investing.com’s guidance withdrawal

Investing.com — Shares of Bechtle AG (ETR: ) fell on Tuesday after the company reported preliminary third-quarter results that showed disappointing performance and prompted the withdrawal of its previously lowered guidance for year

As of 8:10 am (1210 GMT), Bechtle AG was trading down 6.7% at €33,780.

The company said these challenges are due to persistent market uncertainties and declining demand from small and medium-sized business customers.

In its preliminary report, Bechtle reported revenues of 1.51 billion euros for the third quarter, reflecting a modest increase of only 2% year-on-year.

That number was only slightly above the consensus estimate of €1.48 billion, indicating a lackluster performance that fell short of expectations.

Analysts at Jefferies noted that underwhelming performance at the end of the quarter contributed to this subdued growth, which reflects broader macroeconomic concerns that have persisted throughout the quarter.

Bechtle’s pre-tax profit fell 17% year-on-year to 78 million euros, 10% below analysts’ expectations despite relatively flat revenue figures.

EBT margin fell to 5.2%, compared to 6.3% in the same quarter last year, reflecting a weaker product mix and fixed cost challenges.

“While mgmt remains optimistic to see an improvement in 4Q, we view the withdrawn guidance as a sign that the main moving parts, the expected budget increase from public customers and volume-based bonuses are not materializing to the extent expected,” Jefferies analysts said.

Bechtle had previously indicated that it expected EBT’s volume, revenue, earnings and margin to remain flat from the prior year.

Although management expressed cautious optimism about possible improvements in the fourth quarter, its withdrawal from guidance casts doubt on those expectations.