BASF 2012 earnings likely to fall dramatically – analysts

01 November 2011 13:46  [Source: ICIS news]

LONDON (ICIS)--German chemicals major BASF’s 2012 earnings are likely to fall dramatically from 2011 estimates because of deteriorating confidence in the chemicals industry and lower volume growth expectations, US-based analysts said on Tuesday.

Bernstein said slowing volume growth and a slackening supply-demand balance for many chemicals will reduce the company’s earnings.

“Earnings could decline significantly next year (about 5% in an optimistic scenario and up to 40% in a repeat of 2009). Moreover, we estimate the earliest possible upswing would occur in third quarter 2012,” the analysts said.

However, despite overall earnings falling in 2012, the company's oil and gas business will see an increase in profits, Bernstein added.

“We have reduced our earnings estimates primarily in the chemicals and plastics segments due to loosening supply-demand in commodity chemicals. In contrast, we increase our estimates for oil & gas since oil production in Libya is gradually restarting,” the analysts said.

Bernstein maintains a “market-perform” rating for BASF but sharply reduces its 2012 earnings per share estimate by 17% to $5.04 (€3.63).

($1 = €0.72)

By: Leigh Stringer
+44 208 652 3214

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