German industrial and automotive supplier Stabilus has experienced a decrease in its first-quarter profit due to weaker margins in its Americas region. As a result, the company’s stock shares have dropped by 5.5% to EUR60.50, hitting a low of EUR58.40.
In the fiscal first quarter that ended on December 31, Stabilus reported a decline in profit to 11.5 million euros ($12.5 million) from EUR15.1 million in the previous year. Analysts from Stifel have referred to profitability in the Americas as weak, pointing out that margins have contracted from 11% to 5.3% compared to the first quarter of the previous year.
Stabilus faced a slow start to the year in the Americas region, which was attributed to U.S. automotive strikes and higher costs that countered a rise in revenue, according to J.P. Morgan analysts. These analysts also noted that there is a challenging market environment in the Americas region, raising concerns about the company’s top-line guidance.
J.P. Morgan estimates that adjusted earnings before interest and taxes will be 3% below the consensus. However, despite the lower profit, Stabilus has confirmed its fiscal 2024 outlook, which includes revenue targets between EUR1.4 billion and EUR1.5 billion, as well as an adjusted earnings before interest and taxes margin of 13% to 14%.