LUXEMBOURG/NUREMBERG (dpa-AFX) - Linux specialist Suse reported weaker business than expected in the second fiscal quarter. The uncertain economic environment led to postponements of contracts as well as a reduction in the average contract duration, the software provider announced in Luxembourg on the previous evening. In addition, the reorganization of the sales structure had not developed the expected clout and burdened the development. The company, which has its operational headquarters in Nuremberg, therefore lowered its outlook for the year. Investors punished the shares heavily on Thursday.

Shortly after the start of trading on the stock exchange, the shares of the SDax-listed provider plummeted 21 percent to 13.60 euros, returning to the level seen at the end of September. The company was listed on the stock exchange two years ago at an issue price of 30 euros. In the meantime, the share had been worth over 43 euros at its high at the beginning of 2022. Analyst Toby Ogg of JPMorgan calculated that the poorer outlook is likely to lead to cuts in market expectations, especially in cash flow and operating profit.

The company cut its forecast for the current fiscal year 2022/23 (ending October) due to the weak performance in the second quarter. As a result, adjusted sales are expected to increase by a mid-single-digit percentage, while growth at constant exchange rates is likely to be slightly lower.

Suse sees the adjusted earnings margin before interest, taxes, depreciation and amortization (Ebitda) in the mid-30 percent range. Previously, Suse had forecast revenue growth of 11 to 13 percent at constant currency and an operating margin above last year's 37 percent.

For the second quarter, the company expects adjusted revenue of $162.2 million, up one percent, according to key data. Core revenue, however, fell one percent. Suse plans to provide further details on July 6./nas/men/mis