AMS Osram - comment

AMS Osram’s shares and bonds traded down yesterday on the back of Foxconn’s Q2 numbers. A closer examination shows that Q2 results were ahead of guidance, but the caution relates to Foxconn downgrading its outlook for full-year revenue to a slight decline from their previous guidance of flat, reflecting an overall weak global economy and specifically a weak recovery in China. However, this decline does not point to any changes to its medium-term guidance, the Company is expanding its manufacturing facilities and stating its investment of several billion is only a beginning. 

The Foxconn reduction guidance is short-term, with both Foxconn and AMS Osram continuing to invest in the future growth prospects in the sector.