BASFY BASF SE (QX)

By Nathan Allen

Germany's BASF SE (BAS.XE) reported second-quarter results on Friday at 0500 GMT. Here's what you need to know:

SALES: BASF's sales rose 3% to 16.78 billion euros ($19.62 billion) from EUR16.26 billion a year earlier. A 23% jump in oil-and-gas sales compensated for lower volumes at the larger agricultural and performance products divisions.

NET INCOME: Profit for the quarter slipped to EUR1.48 billion from EUR1.50 billion, pulled lower by unfavorable currency swings and cost inflation.

WHAT WE WATCHED:

-GUIDANCE: BASF reiterated its financial guidance for slight growth in sales and earnings before interest, taxes and special items, squelching market speculation that the company was preparing to lift its guidance. The group lifted its guideline oil price for 2018 to EUR70 a barrel from EUR65 a barrel.

-DOWNSTREAM MARGINS: Profitability at BASF's downstream units remained under pressure from high fixed costs and expensive raw materials. Berenberg's Sebastian Bray said the results "confirmed a year-long pattern of outperformance in the upstream, margin-driven misses in the downstream."

-TRADE TENSIONS: Aside from raising its average oil price forecast, BASF left its macroeconomic assessment intact. However, Chief Executive Martin Brudermueller highlighted the risk from "trade conflicts" between the U.S. and China and between the U.S. and the EU. "We are monitoring these developments and the potential effects on our business very closely," he said.

Write to Nathan Allen at nathan.allen@dowjones.com

(END) Dow Jones Newswires

July 27, 2018 09:45 ET (13:45 GMT)

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