Hexagon preannounces, cites weakness in China

And so it begins.

Hexagon announced today that “the impact of increased geopolitical uncertainties on global trade, especially within the electronics business of the Manufacturing Intelligence” (MI) leads Hexagon to believe total revenue for the June quarter will be approximately €975 million, a decline of 1% on an organic basis (even though up 2% in constant currencies and up 4% as reported). The miss in MI drags down revenue for the entire Industrial Enterprise Solutions (IES) reporting segment, which is expected to report an overall revenue decline of 5%.

The company went on to say that “demand in the other markets and divisions has remained broadly in line”, with organic growth of 3% in Geospatial Enterprise Solutions.

As part of its response to this revenue shortfall and in an effort to still meet profitability targets for 2021, Hexagon says it will reduce its global workforce by approximately 700 employees. The company did not give any details, so we don’t know if this is centered on its China business, nor do we know if it mainly affects MI.

We’ll learn more on 26 July 26, when the full earnings report is due out.

We’ll also keep an ear out to see if other PLMish companies see a similar slowdown in China.