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Cloud business helps IBM – König & Bauer needs help

Decline in sales, slump in earnings: The past quarter could have gone better for IBM, but the corona crisis is also weighing on “Big Blue”. Nevertheless, the IT group does better than expected. The reason for this is in the cloud. By contrast, the German printing press manufacturer König & Bauer must apply for a state loan from the SDax in order to overcome the corona crisis.

The most important things about IBM and König & Bauer in advance:

  • IBM defies the corona crisis
  • König & Bauer in the red

The US IT service provider IBM suffered a drop in sales in the past quarter due to the effects of the corona virus pandemic. The result collapsed, according to the information. Nevertheless, “Big Blue” closed the three-month period better than market experts had expected. According to IBM, earnings excluding special items were $ 2.18 per share – a forecast of $ 2.07 per share (FactSet).

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The company, which has been undergoing restructuring for years, put net earnings at $ 1.48 billion – a 46 percent decrease from the same period last year. Revenue declined 5.4 percent year-over-year to $ 18.1 billion in the second quarter. However, analysts (FactSet) had expected a stronger decline. The cloud division was positively surprised: its revenue increased by 30 percent to $ 6.3 billion.

The first quarter also left deep marks on the balance sheet for the German printing press manufacturer König & Bauer. The company then announced that it wanted to significantly reduce costs. Now the group listed in the SDax small value index must apply for government aid. As König & Bauer announced, they want to get a state loan from KfW. The flexibly redeemable loan that the company intends to apply for should have a volume of up to EUR 120 million. The company plans to use it to strengthen stability and strategic flexibility.

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König & Bauer are burdened by the effects of the coronavirus pandemic. In the first quarter, the SDax company slid deeper into the red and posted negative earnings before interest and taxes (EBIT) of EUR 34.9 million – after a loss of EUR 2.8 million in the comparable prior-year period. At the same time, sales slumped by a quarter to 172.4 million euros.

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Source: HSBC

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