Dramatic stock market decline: severe profit warnings lead to double-digit price drops in two companies
Two prominent German companies, Cancom and SFC Energy, have issued profit warnings, citing deteriorating market conditions as the primary reason for their less optimistic financial outlook.
SFC Energy, a provider of decentralized and mobile energy systems, now expects its full-year revenues to be between 146.5 and 161.0 million euros, a significant decrease from previous expectations of 160.6 to 180.9 million euros. The company's full-year EBITDA is now expected to be between 13 and 19 million euros, down from 24.7 to 28.2 million euros.
SFC Energy's revenue for the first half of the year increased by 4% to 73.6 million euros. However, the market expectations were higher, leading to a significant drop in the share price. Analysts suggest a new entry for SFC Energy may not be recommended given the clouded outlook.
Cancom, a leading IT solutions and services provider, has also seen a decline in its financial performance. The company now expects its full-year revenues to be between 1.65 and 1.75 billion euros, down from 1.70 to 1.85 billion euros. Cancom's EBITDA decreased by a third to 37 million euros in the first half of the year, and its adjusted EBITDA fell by almost a third to 8.5 million euros. The share price for Cancom has significantly dropped due to the profit warning, and the stop-loss level for the share price is 24.00 euros or is likely to be breached.
Although specific details on Cancom’s profit warning causes were not found in the search results, the negative market reactions have been evident. For instance, a similar scenario was seen with Heidelberger Druck, where profit-taking and cautious analyst warnings due to economic growth risks and currency weakness caused their shares to sharply decline by over 13% after an initial rally. It is likely that Cancom’s and SFC Energy’s share prices also experienced downward pressure following their profit warnings due to shaken investor confidence.
It is essential to note that the author holds direct positions in Cancom's financial instruments. The author's positions could potentially benefit from the potential price development resulting from the publication. However, given the current market conditions and the clouded outlook for both companies, a new entry for Cancom may not be recommended. The stop-loss level for SFC Energy's share price is 17.50 euros or is likely to be breached.
In summary, both Cancom (with limited information on the causes of the profit warning) and SFC Energy issued profit warnings primarily due to challenging market conditions, causing downward pressure on their share prices as investors reacted to the less optimistic financial outlook.
In the course of the challenging market conditions, both Cancom and SFC Energy have had to issue profit warnings, leading to a decline in their financial performance. As a consequence, the share prices for both companies have been negatively impacted, with the stop-loss level for SFC Energy being 17.50 euros or potentially breached. Furthermore, given the less optimistic financial outlook and current market conditions, a new entry for Cancom may not be advised. The technology sector, including personal finance and investing, could also experience downward pressure as a result of this trend.
