DE40: Philips drops 16% after Q3 results; Volkswagen and Porsche under pressure 📉

• DAX in mixed mood at start of week
• Automotive industry under pressure from Volkswagen and Porsche
• Philips shares down 16% after release of quarterly results

General market situation:

Monday's session on European stock markets brings mixed investor sentiment. Germany's DAX is currently losing 0.20%. Britain's FTSE 100 is losing 0.35% at the same time. France's CAC40, meanwhile, is gaining 0.06%. Investor attention today turns to corporate news (Volkswagen, Philips, Porsche).

Volatility currently observed in the broad European market. Source: xStation

The German benchmark DE40 is trading nearly 0.05% lower during Monday's session. The key support/resistance points of the broad uptrend appear to remain the 19,000-point zone, the 50-day EMA (blue curve on the chart) and the historical peak tested last week, which now serves as the main control zone for the supply and demand sides. Source: xStation

News:

Philips (PHIA.NL) shares are losing 16% in today's session, after the Dutch company reported that Q3 sales fell short of expectations and lowered its full-year comparable sales forecast.

ANNUAL FORECAST

• Comparable sales +0.5% to +1.5%, the company previously estimated +3% to +5%, analysts expect +3.93%
• Adjusted Ebit margin 11.5%, earlier company estimated 11% to 11.5%, analysts expect 11.9%
• Free cash flow €900 million, earlier company estimated €900 million to €1.1 billion

Q3 RESULTS

• Adjusted EBIT EUR 516 million, +13% y/y, estimated EU 535.1 million
• Adjusted EBIT margin 11.8% vs. 10.2% y/y, estimated 11.7%
• Comparable sales -0.5%, estimated +3.04%
• Sales €4.38 billion, -2.1% y/y, estimated €4.58 billion
• Net income €181 million vs. €88 million y/y, estimated €224.7 million

There's also a lot going on today in Volkswagen (VOW1.DE), where the company's shares are losing 1.8%, after Volkswagen announced a plan to close at least three German factories, eliminate tens of thousands of jobs and cut wages by 10%.

Additional pressure in the automotive sector is being applied by Porsche (P911.DE), where the company's shares are losing 4.5% after publishing worse-than-expected sales results. However, the company reaffirmed its earnings forecasts for this fiscal year.

ANNUAL FORECAST

• Revenue of €39-40 billion, estimated at €39.13 billion
• Operating return on sales 14-15%, estimated 14.6%

9-MONTH RESULTS

• - Operating profit EUR 4.04 billion, -27% y/y
• - Revenue €28.56 billion, -5.2% y/y
• - Automotive net cash flow €1.24 billion, -63% y/y
• - Operating return on sales 14.1%, compared to 18.3% y/y

Other news coming out of individual companies in the DAX index. Source: Bloomberg Financial LP