Ciba Specialty Chemicals said on Thursday its markets were not recovering as strongly as it had previously thought, sending its shares lower as it reported second quarter net profit below expectations.
The firm, which makes detergent whiteners and pigments that make Ferraris red, was "very slightly more cautious now (than earlier this year)", Ciba's Chief Financial Officer Michael Jacobi said.
"But we keep (our) outlook even if I say we are slightly more prudent," he told Reuters.
He toned down April's optimism that all end-markets were gathering speed. While conditions had improved, the upswing was patchy now and only evident in some markets.
Second-quarter net income rose 18 percent to 99 million Swiss francs ($78.5 million) from the same quarter a year ago, falling shy of an analyst forecast on average of 107 million.
"The market is likely to see these as poor numbers from Ciba," ING analyst Paul Satchell said. "The company has rarely disappointed the market in recent years but there is little positive news in these results.
Ciba stock was down 6.7 percent at 79.95 francs at 0955 GMT, its lowest level in 17 months, leading the European chemical sector lower. The shares have now lost more than 13 percent since the start of the year.
Ciba's more cautious outlook contrasts with that of key rivals, such as Germany's BASF, which are targeting sharply higher annual profits after earnings in the second quarter surged.
"Competitors are in the middle of an upswing but Ciba seems to be benefiting from that less," said Zuercher Kantonalbank analyst Bernd Pomrehn.
BASF has also said that prices in key markets had improved as it passed on rising raw material costs to customers, but Ciba said it had not been able to do so.
"Reduced price pressure is one of the main goals for the second half," Ciba Chief Executive Armin Meyer told reporters.
"You may say others are gowing stronger. We are a specialty chemicals firm. It is less cyclical for us than for base chemicals," he added.
While Ciba's US sales rebounded strongly and growth was firm in the Asia-Pacific region, Europe lagged, CFO Jacobi said.
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