Dax on a recovery course despite further oil price turmoil

Dusseldorf The German stock market starts trading nicely. In the first trading hour, the index was up 1.1 percent at 10,357 points.

The oil price has dominated the market for the second day in a row. The renewed sell-off on the oil market shows that the historic collapse late Monday evening, which temporarily pushed the price of US crude oil down to minus $ 38 a barrel, was not a singular event, not a one-time market failure. It was only the preliminary climax of a crisis that the oil market has never experienced before.

The answer to the question is crucial: If the June futures contract falls on the US variety WTI as well as the May future below zero dollars in the coming weeks?

The price of a barrel (159 liters) of the US grade WTI for delivery in June has dropped to $ 10.30 today, a drop of more than ten percent. The Brent crude price reached $ 15.98 a barrel, the lowest since June 1999.

Netflix’s strong numbers are reassuring on the stock markets. Due to the corona crisis, the streaming service has reached the record number of 15.8 million new subscribers worldwide in just three months. The cautious outlook sent the stock Although one percent in the aftermarket in the US markets, it could have been worse. On the German stock market, the paper rose 3.2 percent at the opening.

The requirements from overseas are mixed. The US markets have given in significantly, but were able to reduce their losses slightly after the market closed in Germany. The futures contracts on the US stock exchanges signal an increase of 0.2 to 0.5 percent at the start of trading. The prices of the shares on the Tokyo stock exchange fell for the second day in succession after the US crude oil slump, and the Chinese indices rose.

Dates today

The most important number comes from the USA: Because of the oversupply of tank farm capacities, which are apparently almost exhausted worldwide, investors are paying attention to the figures for the US inventory in the afternoon of Central European Time.

On Wednesday, however, company figures are also in focus. Among other things, pose AT&T, Roche and the US tech exchange Nasdaq released their quarterly figures. Chip manufacturer STMicro and US laboratory supplier Thermo Fisher also wrote their books. The latter wants the German competitor Qiagen take over for a good ten billion dollars.
Main focus on the impact of the coronavirus pandemic on business, Börsianer said

Look at individual values

Wirecard: The “Day X”, the moment of truth is there for the online payment service provider: The final KPMG report is due to be published today – in full, how Wirecard has promised. Management hopes to finally draw a line under the debates of the past. At the opening of the stock exchange, the Wirecard share rose by 2.8 percent.

In the run-up to the publication of the quarterly figures, hedge funds had increased their speculation on falling prices at Wirecard. This quota is now 4.28 percent of all freely tradable shares, i.e. 45.27 million shares. (As of April 20)

Further rising prices are likely to put hedge funds under pressure. Because such a short sale, a speculation on falling prices, follows the following principle: So far, the hedge funds have borrowed and sold the 45.27 million shares of Wirecard shareholders such as investment funds.

But in order to return these shares, you have to buy them again beforehand. Of course, if possible at a lower rate.

With an average trading volume of around 1.65 million shares per day this buyback of 45.27 million is not easy to implement.
In the past four weeks, the Wirecard share has increased by more than 40 percent, almost 14 percent since the beginning of the year.

STMicroelectronics: Europe’s largest chip manufacturer expects a decline in sales as a result of the collapse in demand in the auto industry due to corona virus. A minus of around ten percent is expected in the second quarter. However, the share price increases by 4.3 percent. The German competitor also benefits from this Infineon. Infineon paper increases by 2.7 percent.

What the chart technique says

There is currently a lot at stake with the leading German index, the German “blue chips” have a lot to lose. If the break in core support proves to be sustainable at around 10,300 to 10,000 meters, according to chart technology, investors must assume that it has a “second pillar”. Specifically, that means: The Dax should drop again towards 8255 points and in extreme cases even undercut the mark.

The closing price on Tuesday was already below the important mark at 10,279 points. The leading index started its rally of 10,279 points in December 2018, which lasted until a record high in February 2020. The brand was “confirmed” on Tuesday last week because the index had ended trading there.

Despite the friendly start on Wednesday, investors should look south. In the course of the upward recovery, two so-called upward price gaps have remained open since mid-March. With such gaps there was no price position during Dax trading, the lowest price on a trading day was higher than the highest price on the previous day. Such upward price gaps are an important resistance, according to chart technology.

The first gap is closed when the 10,097 points are reached, the second at 9,627 points.

At 11,025 meters there is an important resistance on the top. There is the so-called 50 percent correction of the overarching trend, at which counter-movements very often end. Currently related to the Dax, this means that the downward trend has so far been from the record high in mid-February at 13,795 points to the low point in mid-March at 8255 points.

The 50 percent mark is accordingly at 11,025 points, i.e. exactly in the middle between record high and low point. With the increase to 10,820 points last Tuesday, the index of this brand had already approached. But the focus is currently on the lower price brands.

“When planning wealth, the rule is: never get out completely!”

Here is the page with the DAX course, here is the current tops & flops in the Dax. Current Short sales of investors can be found in our Short sales database.

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Asian stocks fall second consecutive day after US crude oil slumps

Tokyo

A passer-by in front of a display board of the Tokyo Stock Exchange.

(Photo: AFP)

Washington / Tokyo Asian equity markets fell to a two-week low on Wednesday. The drop in crude oil prices gives an idea of ​​the impact of business restrictions due to the corona pandemic: earlier this week, the US futures contract plummeted in May for the first time in history.

In addition to massive oversupply concerns, analysts say, the slump also underscores the technical constraints the market is facing in responding to such shocks. “The negative price was probably an anomaly, but it was also a symptom of major underlying issues that the industry needs to address,” said Arij van Berkel, who heads Lux Research’s energy research team in Amsterdam. It shows that despite the diverse product portfolio in the oil industry, the ability of the industry to switch between markets is “extremely limited”. The fall in oil prices has triggered new caution towards the stock market.

“Overnight stocks of companies that were seen as winners in the ‘post-corona world’ fell like Amazon. This is a worrying sign, ”added Naoya Oshikubo, manager at Sumitomo Mitsui Trust Asset Management. The online giant’s shares fell 2.7 percent on Tuesday.

Look at the indices:

The Tokyo stock exchange was initially weaker on Wednesday. The 225-value Nikkei index was 1.2 percent lower at 19,050 points. The broader Topix index fell by 0.5 percent and stood at 1409 points.

The Shanghai stock exchange was down 0.2 percent. The index of the most important companies in Shanghai and Shenzhen lost 0.1 percent. The MSCI index for Asian stocks outside Japan fell 2.5 percent.

In Asian currency trading, the dollar remained almost unchanged at 107.73 yen, falling 0.1 percent to 7.0833 yuan. The Swiss currency was 0.1 percent higher at 0.9702 francs. At the same time, the euro fell 0.1 percent to $ 1.0847 and hardly changed at CHF 1.0527. The pound sterling lost 0.1 percent to $ 1.2284.

More: Read all current developments regarding the corona pandemic here.

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Record quarter for Netflix – Europe is the largest growth market

San Francisco Also at Netflix has messed up the global corona pandemic a lot: “We are struggling to maintain our service and further organize the post-production of our content,” said Reed Hastings, head of the world’s largest paid streaming service. The Netflix founder even made the presentation of the business figures for the first quarter this time from a bedroom in his apartment building, with blue bed linen in the background.

The fact that Netflix reached the record number of 15.8 million new subscribers worldwide in just three months is of course primarily due to the global curfews and the lack of alternatives at a time when visits to the cinema, concerts and bars are prohibited in many places are. Despite these circumstances, analysts had only expected an average of seven million subscribers.

With the documentary “Tiger King” about an eccentric zoo owner and the dating show “Love is Blind”, Netflix also managed to launch two highly regarded shows. “Our small contribution in this difficult time is to make the house arrest a little more bearable,” said Hastings.

The company from Los Gatos in Silicon Valley now has a total of 182.9 million paying customers worldwide. Even in the United States, where every second household already had a Netflix account, the service grew from around 67.5 to almost 70 million customers.

For several quarters, however, the most important growth drivers for Netflix have been Europe and the Middle East: the streaming service gained almost seven million new customers in the region, which is gradually catching up with Netflix’s home market with a total of 58.7 million.

Although revenue per user decreased slightly in all markets, Netflix increased revenue nearly 28 percent year-over-year to $ 5.77 billion in the quarter, and operating profit grew 17 percent to $ 958 million.

Even the Achilles’ heel of the Netflix balance sheet was no longer the most recent: The company’s cash flow, still $ -1.67 billion in the final quarter of 2019, was slightly positive at $ 162 million between January and March.

Even prepared for a recession

For years, Netflix has been spending more than it takes to produce its own series and films that are believed to be amortized over years. The company therefore has debts of $ 14.1 billion that it has to service with relatively high interest rates of more than six percent.

CFO Spencer Neumann announced that cash flow will still be negative in the full year 2020, but instead of the planned 2.5 billion, it will only be less than one billion dollars – also because the film productions canceled due to Corona save money.

Netflix is ​​less affected than its competitors by the risk of contagion because of the risk of infection, said content manager Ted Sarandos. “We plan well in advance because we publish entire seasons at once.”

Until well into 2021, the planned films and series were largely in the box, and the post-production that was still necessary had been switched to the home office within days. That’s why there are no considerations to postpone Corona start dates so that the existing new releases last longer, said Sarandos.

“Netflix is ​​much more responsive to this new reality than competitors who rely on movie releases, theme parks, or sporting events,” said eMarketer analyst Eric Haggstrom.

The fact that company boss Hastings has kept the service ad-free now helps, because the implosion of advertising expenditure bypasses Netflix. The company sees itself prepared for a global recession: “People tend to stay at home during these times and save on other pleasures,” explained Product Manager Greg Peters.

The stock markets have apparently already priced in a good Netflix result. While the overall market is clearly in the red this year, the Netflix share is a third more expensive than at the beginning of January. After the publication of the record quarterly figures, however, it fell by one percent after the exchange.

Netflix’s cautious forecast may also have contributed to this: “We preferred user growth, so growth will be lower in the third and fourth quarters,” said Hastings.

In the current quarter, the company expects more than $ 6 billion in sales for the first time, but with slower sales growth and only 7.5 million additional subscribers.

More: Amazon, Nvidia and Netflix: Which tech stocks are still worth getting started with.

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Netflix wins significantly more customers than expected due to pandemic

Netflix

A man turns on Netflix: According to the streaming service, 15.8 million paying customers were added worldwide in the first quarter.


(Photo: dpa)

Los Angeles / Bangalore / Los Gatos The coronavirus pandemic brought Netflix significantly more viewers than expected in the first quarter. Worldwide, 15.8 million paying customers were added, said the US company on Tuesday after the market closed. Experts predicted nearly eight million, according to the FactSet research group. It brought it to the end of the quarter Netflix a total of almost 183 million paid memberships.

Netflix said that customer growth and the amount of time spent in front of the screen could decrease with the end of contact restrictions. Nevertheless, the company expects 7.5 million new customers worldwide in the current quarter, almost twice as many as analysts estimate.

Revenue for the quarter rose to $ 5.8 billion from $ 4.5 billion in the prior year period, roughly in line with expert expectations. Net income was 709 million, more than twice the previous quarter.

Netflix shares initially rose more than five percent in after-hours trading, but later turned negative. So far, it has gained more than a third this year. In terms of market value, Netflix was even able to beat its big rival Disney pass by.

More: Ufa boss Nico Hofmann: “We have to do similar things to football”.

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Short ETF speculation is tricky

Bull and bear on the edge of a crumbling cliff

To bet on price losses on the stock exchanges is only worthwhile in the short term.

(Photo: imago images / Ikon Images)

Equities, oil, gold – a look at the fund balance sheet for the first quarter shows that the bottom line is that investors have lost a lot of money in most asset classes. Investors who bet on falling prices have made money, but these bets are tricky.

So-called short ETFs are one way of speculating on falling prices from indices. These exchange-traded index funds reflect the opposite percentage development of indices.

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Hannover Re cancels profit forecast – dividend should remain

Hanover The world’s third largest reinsurer Hannover Re withdraws its 2020 profit target due to the corona pandemic. The expected negative consequences of the crisis cannot yet be assessed due to the great uncertainties, the company listed in the MDax surprisingly announced on Tuesday evening in Hanover.

Management expects increased burdens, especially in capital investments and property and casualty reinsurance. In mid-March, Hannover Re boss Jean-Jacques Henchoz had targeted an annual profit of 1.2 billion euros.

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IBM earns less – but maintains dividends

San Francisco This was not how Arvind Krishna imagined his entry. Born in India, he has been CEO of IBM. The disaster began in March. In the first two months of the year, IBM was still on target with its self-set goals. But then the full corona braking came.

IBM is the first company in the tech industry to present its figures. Giants like Microsoft, Amazon, alphabet, Alibaba or Oracle will follow. They will not be able to avoid every negative trend either.

On Monday, as expected, Krishna canceled all forecasts for 2020 due to the extreme uncertainty and at the same time emphasized the healthy balance sheet and financial situation of the company: “We will emerge from the pandemic more than we entered”, he promises to investors.

The cloud business is growing strongly. And the high dividend is also certain, he emphasizes. But Wall Street doesn’t want to hear about it at the moment. The stock plummeted by a good four percent.

March turned everything upside down. First, new business broke away because customers across the world suddenly changed their priorities. It was no longer about breaking into a new, digital millennium. Instead, the existing IT systems had to be prepared for the emerging corona crisis in an almost panic.

Within a few days, entire companies were converted to home offices that had never heard of them. IBM cites an insurer as an example, in which 40,000 employees were converted to remote work within a few days.

Overall, there have been clear shifts on the customer side. Above all, industries that predominantly rely on transactions, such as retail or car trading, suddenly saw themselves against nothing. Contracts have been canceled or not concluded.

Many contracts believed to be void

Financial institutions, payment processors, government organizations and important authorities in turn had to expand their IT in order to cope with the extreme increase in demand. For a children’s hospital in Atlanta, according to Krishna, IBM used the artificial intelligence “Watson”, for example, to set up a digital assistant to handle the countless calls from concerned parents. The system can answer over a thousand different inquiries. This greatly relieved the hospital and the staff.

But none of this was enough to compensate for the loss of contracts for business software that were actually believed to be safe. The industry traditionally brings contracts under wraps in the last two weeks of a quarter, said CFO James Kavanaugh. Now the signature dates had been canceled. Competitors Microsoft, Amazon, Google and Oracle may be affected.

The break-away was particularly noticeable among retail and automotive customers, it is said. But the CFO also emphasized that “around 70 percent” of IBM customers come from industries that, according to data from market researchers such as Gartner and IDG, are only “minimally” or “moderately” affected by Corona, such as credit card or utility companies.

In the end, from January to March, IBM had consolidated sales of $ 17.57 billion, compared to $ 18.18 billion a year earlier. Factset analysts had predicted $ 17.59 billion. Net earnings are reported at $ 1.18 billion, or $ 1.31 per share. Last year it was $ 1.59 billion, or $ 1.78 per share.

The new cloud division went particularly well with the acquisition of the software manufacturer “Red Hat”. $ 5.24 billion in sales are up five percent.

Red Hat had $ 1.1 billion in sales, which would have been an increase of 20 percent in isolation. But for accounting reasons, only 719 million of them can be reported, explains CEO Krishna. Nevertheless, the acquisition is still of crucial importance.

Good liquidity

IBM relies on the “hybrid cloud”. Here, the old existing IT infrastructure is merged with new IT in a cloud. The US group believes that it can offer companies fast and affordable cloud solutions. IBM sees a potential trillion market in the hybrid cloud.

“Global Business Services” performed well with $ 4.14 billion. Analysts had expected $ 3.91 billion. For example, strategic advice, system integration and all programming work are summarized here. Services that are in demand now. All in all, however, was not enough to compensate for the failures in business software.

Even if IBM does not provide a forecast for the further course of business, the CEO remains cautiously optimistic. Recurring sales from long-term contracts now accounted for 60 percent of IBM’s business, ten years ago it was less than 50 percent.

In April, the CEO also points out, there were “no significant deviations” in the subscription business with software or services, Krishna encouraged in an interview with analysts. He feels “pretty good” with it. That’s why IBM maintains the fairly high dividend yield of over five percent. Krishna is “very confident” that she is not in danger.

IBM paid $ 1.4 billion in dividends in the prior-year quarter that were covered by free cash flow. In the twelve months to the end of March combined, total free cash flow was $ 11.6 billion.

Free cash flow not only pays dividends, but also share buybacks or acquisitions. IBM stopped buying back shares in mid-2019. Cash and cash equivalents were three billion dollars higher than last year. Such numbers are currently important to survive in these times.

More: Many companies are back on or near their record prices. But the choice for investors is not easy. What investors should know.

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Oil price collapse also pushes the Dax down

Dax curve

View of the Dax curve in the Frankfurt trading hall.


(Photo: dpa)

Dusseldorf The German stock market cannot escape yesterday’s drop in the price of oil. The DAX is down 2.3 percent in the morning trade at 10,435 points.

The topic on the markets is the oil price collapse on Monday evening, which occurred in Germany after the market closed. In the United States, the price of oil plummeted for the first time in its history due to the coronavirus pandemic. Sellers had to pay money for someone to take their oil: The price of the futures contract for the US variety WTI for May plummeted Monday by almost $ 56 to minus $ 37.63 a barrel (159 liters).

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Oil price collapse also pulls the Dax into the red

Dusseldorf The German stock market cannot escape yesterday’s drop in the price of oil. Of the Dax is down 1.9 percent in the first hour of trading at 10,473 points.

The topic on the markets is the oil price collapse on Monday evening, which occurred after Germany closed on the stock exchange. In the United States, the price of oil plummeted for the first time in its history due to the coronavirus pandemic. Sellers have to pay money for someone to take their oil: The price for the US WTI futures contract for May plummeted Monday by almost $ 56 to minus $ 37.63 a barrel (159 liters).

Why this is relevant: Should the US oil industry with its many smaller companies come under even greater pressure, experts fear a wave of bankruptcies that could possibly also burden the financial sector.

The other burden is the new quarterly figures. Already on Monday, exchange expert Stephan Heibel warned after evaluating the Handelsblatt survey Dax-Sentiment: “Downside potential threatens during the reporting season, because company figures will show the extent of the economic damage of the quarantine measures in the coming days and weeks”.

This forecast became reality a day later: IBM was the first company in the US tech industry to present figures and, due to the extreme uncertainty, canceled all forecasts for 2020. Even if company boss Arvind Krishna emphasized the healthy balance sheet and financial situation of the company. After all, the “high dividend is certain”.

But Wall Street does not want to hear anything about it: the stock plummeted by a good four percent. And IBM paper also fell by around four percent on the German stock market.

In the US, the other technology giants are like Microsoft, Amazon (AWS Cloud), Google Cloud, Alibaba or Oracle will follow in the coming days. They will not be able to avoid every negative trend either.

In Germany, accordingly SAP– Share under pressure, which has to work out two negative reports. In addition to the weak numbers from IBM, the company separates from its co-boss Jennifer Morgan in the midst of the corona crisis. The 48-year-old will leave SAP on April 30.

The share loses 2.6 percent at the opening. The software manufacturer is the most valuable DAX company and, due to its high market capitalization, has the greatest influence of all 30 values ​​on the price development of the stock market barometer.

It doesn’t help that Europe’s largest software company made a significant profit in the first quarter. Between January and March, Walldorf residents earned 811 million euros. SAP had already released preliminary figures and had to cut its annual forecast due to the Corona crisis. The final indicators from SAP corresponded to the preliminary, a dealer said.

The requirements from overseas are weak: the oil price collapse has not only burdened the US stock exchanges, but has also clearly lost the Asian markets. Futures on the US selection index S&P 500 have turned negative after initial gains, signaling a weaker opening of the trade.

Look at the individual values

Drägerwerk: The medical technology manufacturer, which is very busy due to the corona pandemic, has apparently raised new capital. The manufacturer of ventilation machines and other devices for intensive care medicine claims to have gross proceeds of EUR 76.50 million from the issue of around one million preferred shares. The shares were placed with institutional investors by means of an accelerated placement process. The share loses 1.7 percent. Last week had the hedge fund Sandbar Asset Management its speculation on falling prices of the Drägerwerk share has increased to 0.71 percent three freely tradable shares.

Danone: Due to the uncertainties resulting from the corona pandemic, the French food company has now completely withdrawn its already reduced annual targets. The effects of the global shutdown are not foreseeable. In the first quarter, the group posted sales growth of 1.7 percent to 6.24 billion euros. The share loses 0.4 percent.

Sartorius: The laboratory supplier started the year with double-digit growth rates. With an increase in sales of 16.5 percent to EUR 509.9 million, the operating result rose by 20.9 percent to EUR 137.9 million. The Management Board raised its forecast for the full year and increased the share by 4.9 percent.

Look at other asset classes

The price of US oil is after its historic fall into negative territory on Tuesday again climbed slightly above zero dollars. With weak trading, the price of the US WTI futures contract rose by $ 39 in May to $ 0.94 a barrel (159 liters). In contrast, the price of the North Sea variety Brent fell by 3.6 percent to $ 24.67.

On Monday, the oil price in the United States plummeted by just under $ 56 to minus $ 37.63 a barrel (159 liters) due to the coronavirus pandemic, thus falling for the first time in its history.

The pandemic has caused global oil demand to collapse by almost a third. Buyers are faced with the problem that the oil storage capacity will soon be exhausted.

The yield differential remains on the bond market (Spread) between German and Italian government bonds at a high level. With a term of ten years, this value is 2.37 percent. The corresponding Italian bonds are currently returning at 1.944 percent and are approaching their monthly highs.

The European heads of state and government are unlikely to make a final decision about a reconstruction fund at the EU summit. That was what EU diplomats said. Chancellor Angela Merkel had already rejected so-called corona bonds yesterday.

“When planning wealth, the rule is: never get out completely!”

What the chart technique says

The leading German index is again approaching its important support zone, which is in the range of 10,391 to 10,279 points. From the second brand, the leading index started its rally in December 2018, which continued until a record high in February 2020. The brand was “confirmed” last Tuesday because the index ended trading right there.

Just below that there are so-called price gaps for which there were no quotes this year. The last gap would be closed at a Dax level of 10,097 points.

At 11,025 meters there is an important resistance on the top. There is the so-called 50 percent correction of the overarching trend, at which counter-movements very often end. Currently related to the Dax, this means that the downward trend has so far been from the record high in mid-February at 13,795 points to the low point in mid-March at 8255 points.

The 50 percent mark is accordingly at 11,025 points, i.e. exactly in the middle between record high and low point. With the increase to 10,820 points last Tuesday, the index of this brand has already approached.

Should the Frankfurt benchmark break this 11,025 point mark, the next resistance would be at 11,266 points, the August 2019 interim low.

Here is the page with the DAX course, here is the current tops & flops in the Dax. Current Short sales of investors can be found in our Short sales database.

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Despite surge in medical technology: Philips cancels annual targets

Frankfurt A sharp decline in the business with household appliances and consumer products due to the corona crisis has occurred in the Dutch PhilipsGroup slump in profit in the first quarter. In medical technology, however, the pandemic led to higher sales of ventilators and monitoring monitors for patients and ventilators, among other things. The demand for IT solutions for the healthcare industry and telemedical offerings also increased.

CEO Frans van Houten withdrew the annual targets still issued at the end of January, according to which sales should increase between four and six percent. Now the Philips CEO only expects a modest increase in sales and a similar improvement in the margin.

“Given the uncertainties and volatility, we cannot give a more specific outlook for 2020 at this point,” said van Houten. The company anticipates a further decline in business in the second quarter as the pandemic has spread worldwide since March. The company boss hopes for a recovery in the second half of the year.

The bottom line, the Philips boss sees the corona crisis as a confirmation of the corporate strategy of the past few years, in which the company has focused heavily on digital technologies. “We have always said that health IT and cloud-based solutions have to play a greater role in order to network providers with each other and with the patient.

The demand for such offers is now accelerating due to this crisis, ”said van Houten in an interview with the Handelsblatt. Among other things, Philips has developed a smartphone app that makes it easier for doctors to remotely care for Covid patients.

Nevertheless, medical technology was unable to compensate for the weak business with consumer products at Philips: Overall, sales in the first quarter remained almost stable at 4.2 billion euros. Calculated on a comparable basis – i.e. without currency effects and purchases and sales – sales shrank by two percent. Net profit decreased from € 162 million in the prior-year quarter to € 39 million.

Order intake increases by 23 percent

The first quarter results were below analysts’ expectations. Still, many stuck to their recommendations. Philips’ position as a manufacturer of urgently needed medical products will help the company to survive the crisis without major damage, say the analysts of the Commerzbank.

Positive news from Philips includes that order intake rose 23 percent in the first quarter. The company also adheres to the planned dividend payment of 0.85 cents, which is now to be paid out in shares.

graphic

At the Euronext in Paris, Philips’ shares temporarily rose by more than seven percent. The titles of other medical technology companies such as Drägerwerk and Siemens Healthineers won.

The fact that the corona crisis brings medical technology companies an order boost does not apply to all companies in the industry. Because the pandemic is delaying some predictable operations, which has negative effects on manufacturers of artificial joints and surgical equipment.

The US company, for example, had last week Johnson & Johnson significantly reduced its sales forecast for the medical technology division. The family-owned company B. Braun, whose subsidiary Aesculap manufactures artificial joints and surgical devices, also expects demand in this business area to decline temporarily in the regions affected by the Corona crisis.

Philips also feels that these predictable, so-called elective interventions are being postponed. Especially in the cardiovascular area. Many cardiovascular surgeries that are supported with Philips imaging technology are being put on hold.

Frans Van Houten believes the impact on imaging techniques is quite large. For this reason, Philips expects sales in the Diagnostics & Treatment business areas to decline overall. “We expect these patients to come back in the third quarter when the situation normalizes,” says van Houten.

Production capacity is greatly expanded

In order to meet the significantly increased need for ventilators and patient monitoring systems, Philips is investing more than 100 million euros in expanding production capacities in the USA and also at the German location in Böblingen.

For example, the production of clinical ventilators is expected to increase fourfold by the third quarter. Among other things, Philips wants to serve a major order from the US government for 43,000 respiratory advisors and at the same time supply other regions with the urgently needed medical equipment.

Despite its corona crisis, Philips is sticking to its plan to split off the household appliances division. The company announced in January that it was parting from the 2.3 billion euro business with coffee machines, deep fryers and vacuum cleaners because it does not fit the company’s medical technology focus.

“We are making progress with the preparations to split off the household appliances division. We said the process takes 12 to 18 months. We are on target. ”Although the division saw double-digit sales losses in the first quarter, Houten does not believe that this will have a negative impact on price negotiations in a possible sales process.

“The household products business is a strong business. We know from previous crises like the SARS pandemic or the economic crisis how quickly business is recovering. We have a strong brand, ”the Philips boss is confident.

More: Philips CEO: “There will be no Google model in the health sector”

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