Wacker stock falls on earnings miss and guidance concerns

Investing.com -- Shares of Wacker Chemie (ETR:WCHG) AG (ETR:WCH) tumbled 3.6% after the company reported first-quarter earnings that fell short of market expectations. The German chemical company’s underlying adjusted EBITDA for the first quarter of 2025 came in at €127 million, a decline of 26% year-on-year (YoY) and 9% below the Visible Alpha consensus of €140 million.

Despite sales slightly exceeding consensus at €1,478 million, up 1% from the Visible Alpha consensus of €1,467 million, the company’s volumes dropped by 1% YoY. Flat pricing year-on-year and a 1% tailwind from foreign exchange rates did little to bolster the bottom line.

The company’s free cash flow (FCF) in the first quarter was an outflow of €167 million, compared to an outflow of €139 million in the same period last year, due to lower earnings, an outflow of working capital, and higher cash taxes.

Wacker’s net debt increased to €800 million at the end of the first quarter of 2025, up from €661 million at the end of the previous year. The pension deficit showed a slight improvement, standing at €710 million at the end of March compared to €752 million at the end of 2024.

Silicones, one of the company’s divisions, reported a strong performance with EBITDA of €108 million, up 33% YoY, driven by a 5% increase in sales and strong growth in specialty volumes. However, the Polysilicon and Polymers segments experienced declines in EBITDA by 33% and 34% YoY, respectively, reflecting challenges such as lower capacity utilization and weaker construction volumes.

The company’s full-year 2025 guidance remains unchanged, with EBITDA expected to be in the range of €700 million to €900 million on sales between €6.1 billion and €6.4 billion. This outlook is somewhat optimistic compared to the Visible Alpha consensus, with the mid-point of the EBITDA guidance being 2% above consensus estimates.

Management’s comments on the impact of international trade relations and current tariff conflicts indicate potential risks to economic growth and the company’s future performance. No specific guidance was provided for the second quarter of 2025, leaving some investors concerned about the near-term outlook.

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