Bechtle AG Sees Shares Dip After Disappointing Q3 Results

Shares of Bechtle AG (ETR:BC8G) fell on Tuesday following the company's preliminary results for the third quarter, which disclosed disappointing performance and prompted the withdrawal of previously lowered guidance for the year.

As of 8:10 am (1210 GMT), Bechtle AG was trading 6.7% lower at €33.780.

The company attributed these challenges to persistent market uncertainties and reduced demand from small and medium-sized business clients.

In its preliminary report, Bechtle reported revenues of €1.51 billion for the third quarter, reflecting a modest year-over-year increase of 2%. This figure 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 the underwhelming quarter-end performance contributed to the muted growth, mirroring broader macroeconomic concerns persisting throughout the quarter.

Bechtle's earnings before taxes (EBT) fell by 17% year-over-year to €78 million, which was 10% below analysts' expectations despite relatively stable revenue figures. The EBT margin decreased to 5.2%, compared to 6.3% during the same quarter last year, reflecting a weaker product mix alongside fixed cost challenges.

"Even though management remains optimistic about seeing improvement in Q4, we consider the withdrawn guidance to be a sign that the anticipated budget flush from public clients and volume-based bonuses are not materializing to the extent expected," stated analysts at Jefferies.

Bechtle had initially indicated that it expected business volume, revenue, earnings, and EBT margin to remain consistent with the prior year. However, management's withdrawal of guidance casts doubts on those expectations, despite their cautious optimism for potential improvements in the fourth quarter.