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Challenges for DAX groups: Siemens expands, ThyssenKrupp steadies, RWE remains on track
Welcome to our rapid-fire roundup of the stock market and financial news, where we keep you in the know about movers, shakers, and trends in the world of finance.
Siemens Lays the Smackdown on Uncertainty 💪
In a bold move, Siemens finessed sales and profits for the second quarter of the fiscal year, blowing past expectations. Profits skipped up by around 11% compared to the previous year, setting camp at a whopping 2.4 billion euros. Sales also popped by 7%, as they shot up to 19.8 billion euros. Siemens CEO, Roland Busch, hailed the company's global presence as a major strength, while their CFO, Ralf P. Thomas, kept up the positive vibe with further profits on the horizon. The Smart Infrastructure segment showed its clout, with an impressive 66% leap in results, thanks in no small part to a sales boost.
The automation business, which has been on a battle for survival, began to show encouraging signs of recovery. The cause for this turnaround is due in part to an increase in orders from China, as inventory reduction there is coming to an end, while demand in Germany is dampening significantly. Despite the improved outlook, Siemens remains committed to its previously announced job cuts: by the end of September 2027, around 6,000 jobs worldwide will be axed, including 2,850 in Germany – mainly in the automation sector.
ThyssenKrupp Stands Firm on Forecasts 🚗
Despite some losses in the steel business, ThyssenKrupp isn't budging on its forecast for the 2024/25 fiscal year. The company still believes it'll garner an operating result between 600 million and 1 billion euros. On the Q2 front, adjusted EBIT fell to 19 million euros – a nose-dive of 90% compared to the previous year. The steel segment was the one to blame, posting a loss of 23 million euros.
CEO Miguel Lopez is betting on better market conditions and the positive effects from ongoing measures in the second half of the year. Other key moves include a planned spin-off of a minority stake in the marine business this year, and the achievement of a quarterly surplus of 167 million euros through the sale of ThyssenKrupp Industries India. For the full year, a profit of between 100 and 500 million euros is projected.
RWE Struggles but Keeps Faith 💸
RWE put up smaller profits in the first quarter but remains steadfast in its yearly targets. Adjusted EBITDA took a hit, plummeting from 1.7 to 1.3 billion euros chiefly due to weaker wind conditions in the renewable energy biz and a suave slump in energy trading, where the operating profit shrank from 251 to 15 million euros. Despite these losses, the company stayed the course with its forecast, promising an EBITDA between 4.55 and 5.15 billion euros and an adjusted net profit of 1.3 to 1.8 billion euros. They're also looking forward to maintaining a dividend of 1.20 euros.
CFO Michael Müller emphasized their ambitious expansion portfolio plan. In the first quarter, 600 megawatts of fresh capacity was hooked up to the grid, and all ongoing construction projects are running on budget. By the end of 2026, they're targeting the completion of plants with a total capacity of 8 gigawatts, including the Sofia offshore wind farm in the UK.
DAX and Eurozone Indexes Hit Record Highs 🏆
Kicking off trading on Friday, the DAX index soared to a new record high, resting at almost 23,519 points. The German benchmark index continued its hot streak since April, after rebounding from the initial shock of U.S. President Donald Trump's announcement of massive tariff hikes and China's retaliatory measures. The DAX gained 0.7% in the opening bell, closing in at 23,494 points.
The Eurozone index, EuroStoxx 50, also joined in the fun, climbing 0.4%. Despite not quite reaching its March record, the MDax of medium-sized German companies finished the day up 0.27% at 29,635 points. It still's got some distance to cover to reach its 2021 high.
Rheinmetall Drops Jaws with Record Revenue 💣
Q1 found Rheinmetall doubling its net profit YOY to a steaming €108 million. The defense behemoth is reaping big benefits from the ongoing arms boom. CEO Armin Papperger exclaimed, "We must and will deliver. We are experiencing growth like never before in this group, and we are inching ever closer to our goal of becoming a global defense champion." At the end of April, the company announced a 46% revenue hike to €2.3 billion. The military biz played a significant role in this victory, with revenues increasing by approximately 73%. The operating result jumped 49% to €199 million.
For the full year, Rheinmetall is sticking to its bold targets: Revenue is slated to grow by 25 to 30%, with a whopping 35 to 40% climb in the military segment. The operating margin is also expected to nudge upward slightly to around 15.5%. Potential arms spending perturbations later on might necessitate an adjustment to the forecast. The charge in the defense industry is primarily due to Russia's assault on Ukraine. The upswing is also bolstered by Donald Trump's aggressive security policy line, which is urging higher defense spending within NATO.
Strong Quarterly Statements Power DAX 💪
The German benchmark index, DAX, keeps the momentum going, basking in the glow of robust quarterly reports. Attention is also focused on the GfK consumer climate index for May, which indicates that consumer sentiment in Germany, though still gloomy, has improved slightly and is hovering above expectations.
Aside from Q1 updates, market watchers are keeping their eyes on reports by the "Wall Street Journal" and Bloomberg about potential leniency from U.S. President Donald Trump when it comes to tariffs on the auto industry. This development could further liven spirits. The DAX surged 0.5% to 22,373 points shortly after market opening, following a brief rally to 22,443 points the previous day, which saw the index recover around 21% from its monthly low. The index has now made a complete comeback from the drop triggered by U.S. President Trump's announcement of extreme tariff packages on the "Liberation Day" of the USA.
The MDax of medium-sized companies climbed 0.4% to 28,423 points at market opening. The Eurozone benchmark index, EuroStoxx 50, rose 0.1% to 5,175 points.
dpa
DWS Grows Quarterly Profit by 37% to €199 Million - Second Highest in History; Revenue jumps to €753 Million 💸
DWS, the asset management wing of Deutsche Bank, saw a remarkable surge in quarterly profit, climbing 37% to €199 million – the second-highest in its history. Revenue shot up to €753 million, thanks primarily to strong inflows into exchange-traded funds (ETFs). Although actively managed funds suffered slight outflows, the total assets under management managed to stay stable. The cost-to-income ratio improved to 62.2%, with DWS aiming to hit 61.5% for the entire year. "Our improving operational efficiency allows us to demonstrate strength in the current environment," declared CFO Markus Kobler, as reported by the FAZ.
Unicredit Cleared to Grab Commerzbank Stake 🔓
The German Federal Cartel Office has granted permission for Italian banking giant Unicredit to acquire up to a 29.99% stake in Commerzbank, with no strings attached. Although the office sees Unicredit's acquisition enhancing its position in German retail and corporate banking, it believes there is sufficient competition from other institutions like Deutsche Bank, DZ Bank, and assorted regional banks. The authority also dismissed concerns about credit provision following a possible merger, asserting that national and international alternatives, as well as other financing options, remain available.
However, any takeover plans are shrouded in controversy: Critics fear constraints on credit provision in the event of a merger. Unicredit currently holds a share of 9.5%, with the right to claim an additional 18.5% via derivatives, and has recently adopted a more cautious stance, not least because the increased market value of Commerzbank has soothed their ambitions. A final decision on future moves is not expected this year.
US Stocks Falter Amid China Trade Uncertainty 📉
After an impressive rally on Wednesday, US stock markets tumbled on Thursday, due to renewed tension in the trade war with China. The Dow Jones shed over 2,100 points, with the S&P 500 plunging by as much as 6%, and the Nasdaq nosediving by 7%. Recovery attempts trimmed some of the losses, but all three indices still finished the day in the red. The ongoing uncertainty surrounding the trade conflict with China was the primary cause of the renewed market anxiety.
Despite the 90-day delay in mutual tariffs by President Trump, high tariffs on Chinese goods remain in place. Analysts at the White House claim the combined overall tariff rate for China is 145%, which is way higher than previously presumed. A JPMorgan analysis suggests that the average effective tariff rate will continue to increase due to the reprieve, causing unease among investors.
Beyond the stock markets, there were significant volatilities: The yield on 10-year US Treasury notes briefly turned positive after its drop, the VIX volatility index spiked by over 50%, oil prices swooned by over 3%, and gold gained. Market specialists like Jeremy Siegel consider the escalation of tariffs as an ongoing threat – Wednesday's rally may have merely been a momentary reprieve.
DAX Surging 8.2% After Trump Zoll Pause 📈
In a surprising turn of events, US President Donald Trump suspended most of his tariffs on Wednesday evening (CET), resulting in a euphoric reaction in the German benchmark index DAX. After several days of tumbling, the DAX soared 8.2% at the opening on Thursday, reaching a peak of 21,291.15 points.
Meanwhile, on the same day that saw a 27% plunge in the morning, the Rheinmetall stock rebounded by an impressive 39%. The trigger for this rebound was a massive stock shudder triggered by Trump's new tariffs. CEO Armin Papperger made a statement by buying shares worth over 300,000 euros, with his holding also investing over 400,000 euros. This display of corporate confidence bolstered investor faith. Despite the turbulence, Rheinmetall remains a prime beneficiary of global rearmament, but the wild price fluctuations are a source of concern.
US Stocks Decline on Monday: Dow Jones Starts in the Red 📉
The stock market crash on the New York Stock Exchange due to the trade conflict continues. On Monday, the world's most well-known stock index, the Dow Jones, opened in the red, dipping to 37,051.71 points.
The tariff announcements made by US President Donald Trump on Thursday had already pushed stock prices into the crimson zone the previous day, dragging the DAX down to its lowest level since early February at the beginning of trading. By closing time, the DAX had lost 2.3% to 21,873 points.
The MDax of medium-sized companies also shed 2.44% to 26,824 points. The Eurozone leading index, EuroStoxx 50, also dropped by over 2%. Stephen Dover, market strategist at Franklin Templeton, declared the end of the free trade era. Trump's tariffs were overall higher than expected. Safe havens like gold and government bonds were in demand in this environment.
The tariff package also brings concerns about economic growth. Central banks could cushion some of the economic consequences through loose monetary policy measures, said Andreas Lipkow, an expert on the stock market. However, they are also constrained by the narrow corset of inflation development, which is also influenced by the tariffs.
US President Donald Trump had threatened for weeks with a comprehensive XXL tariff package. His plans, presented the night before, were both intricate and unprecedented in their breadth. The stock exchanges worldwide reacted with high losses.
From Saturday, the USA will impose a 10% tariff on all imports from all countries. In addition, the US government announced a complex mechanism of reciprocal tariffs, which provides for higher duties for many countries. For the European Union, this means that exports from its member countries to the United States will be subject to a 20 percent tariff starting next week.
President Donald Trump's announced auto tariffs have inflicted losses on the DAX. In the first trading minutes, the German benchmark index dropped 1.54% to 22,488.09 points.
The MDAX of medium-sized companies fell 1.35% to 28,473.82 points. The Euro Stoxx 50, the leading index for the Eurozone, also fell by 1.3%.
No Wind of Profit from the USA for Audi 💸
Audi's profits took a nosedive in 2024 by more than 30%. The Ingolstadt-based VW subsidiary's post-tax result for 2024 shrank to 4.2 billion euros, the company announced. This marks the second significant decline in a row. The figure includes not only the core brand but also the Audi Group, which encompasses Bentley, Lamborghini, and Ducati. Audi is answering the current challenges with job cuts, as revealed on Monday evening.
"Last year, we said that 2024 would be a year of transition. Unfortunately, that has proven to be the case," said Audi CEO Gernot Döllner regarding the results. The challenges persist. Weak demand is met with increased supply, particularly in China.
In 2024, Audi, like many other automakers, grappled with weak demand and price wars in China. The Ingolstadt-based company also experienced issues with missing parts for larger engines in the first half of the year, as well as high provisions for the closure of the Brussels plant. The core brand's sales slumped radically, falling by nearly 8% to 64.5 billion euros.
Deutz Stock Skyrockets by More Than 30% in a Single Day 🚀
The Cologne engine manufacturer Deutz is increasingly focusing on the defense sector and further developing its strategy accordingly. According to CEO Sebastian Schulte, the turning point requires modernized military equipment – an area where Deutz can play a crucial role with its engines. The stock responded with price surges.
On March 18, the stock was still worth 5.82 euros, but it temporarily shot up to 7.66 euros, reflecting a 31% increase. The current stock value stands at 6.92 euros.
Bayer Takes a Hit from Cancer Trial Verdict 💉
Bad news for Bayer: A US jury has ordered the German pharmaceutical giant to pay nearly $2.1 billion in damages. The plaintiffs' attorneys announced this over the weekend.
The sum consists of $65 million in compensatory damages and $2 billion in punitive damages. The plaintiff alleges that glyphosate caused his cancer. Bayer stated that it plans to appeal the decision, which is the highest payment ever seen in these lawsuits. The verdict also impacted the stock price. The stock dropped by 6.6% in one day.
Employee Participation Results for 2024 💰
For the employee participation results for the year 2024, which will be paid out this year, the reduction does not yet apply. Despite this, the figure for a skilled worker remains low at 5,310 euros due in part to its dependency on operating results. Last year, it was 8,840 euros.
Steyr Motors Sees a 317% Boost in Five Days 🎯
The stock of engine manufacturer Steyr has soared by more than 300% in just five days. Since its IPO in October, the stock value has risen sevenfold.
The growth is attributed in part to a new large order from Brazil. According to the financial magazine "Der Aktionär", Steyr's order backlog stands at 200 million euros until 2027.
Currently, the company is profiting massively from the global arms boom. Steyr produces diesel engines for boats, tanks, and other military vehicles. It has also struck a deal with Rheinmetall for the German Leopard 2 tank.
Disclaimer: Stocks, real estate, and other investments are inherently risky. A total loss of the invested capital is a possibility that cannot be ruled out. The published articles, data, and forecasts are not recommendations to buy or sell securities or rights. They do not take the place of professional advice.
- The finance world eagerly monitors advancements in technology as it increasingly impacts investing and business strategies.
- As technology progresses, companies like Siemens are leveraging its capabilities to drive improvements in their automation business, contributing to its recovery.
