European companies are soon to release their earnings reports for Q2. Due to the unusual amount of volatility in Q2 it´ll be a highly anticipated event. A key aspect will be company guidance which hasn´t been disclosed by the majority of DAX-30 companies in the Q1 results.
Looking back to the Q1 earnings reports it can be summarized that approx. 57% or 17 of the German DAX-30 companies did not choose to include a quantifiable guidance. Referring to the remaining 13, which did, came from defensive sectors like healthcare, real estate or utilities. However, most of the DAX companies classified as materials, and therefore more cyclical, offered a guidance as well. Looking at the precision, 85% conveyed a range whereas 15% had concrete numbers in their reports.
Surprisingly, sectors seen more defensive such as consumer discretionary and consumer staples did not provide any guidance. Due to the development of this pandemic it isn´t an unexpected fact that many companies decided to withhold that. However, to increase investors´ confidence companies might convey that aspect in Q2 earnings reports.
The Vara Research team is looking forward to the upcoming results and is excited to follow up with new insights.