(Reuters) -Linde, the world’s largest industrial gases company, forecast second-quarter adjusted earnings below analysts’ expectations on Thursday, citing macroeconomic headwinds and weak demand in the European markets.
Chemical companies in Europe have been grappling with slowing demand and rising raw material costs. A rigorous regulatory landscape is also compelling businesses to reassess their approach within the region.
The German economy, the largest in Europe and which accounted for 7.6% of Linde’s 2024 total sales, has been affected by intensifying competition from abroad, weak demand and an industrial slowdown.
CEO Sanjiv Lamba in February had flagged continued softening in Europe, primarily Western Europe, with lower volumes in metals, manufacturing chemicals and energy.
Linde is seen as a bellwether for industrial production as it supplies gases for a range of customers in sectors, including chemicals, manufacturing, steel-making, and food and beverages.
The company saw the EMEA (Europe, Middle East and Africa) region segment post first-quarter sales of $2.03 billion, slightly down from $2.09 billion a year ago.
Sales at its APAC (Asia Pacific) region segment fell to $1.54 billion from $1.59 billion a year earlier.
According to Linde’s annual report, nearly 65% of its 2024 sales took place outside of the United States.
The company, which supplies gases such as oxygen, nitrogen and hydrogen to factories and hospitals, expects second-quarter adjusted earnings to be between $3.95 and $4.05 per share. Analysts on average were expecting $4.09 per share, according to data compiled by LSEG.
The company forecast its annual adjusted profit to between $16.20 and $16.50 per share, compared with its previous projection of $16.15 to $16.55 per share.
The U.S.-German company’s first-quarter adjusted profit stood at $3.95 per share, higher than the estimate of $3.92.
(Reporting by Pooja Menon in Bengaluru; Editing by Shilpi Majumdar)
