The second Austrian victory of the campaign has left the French strategy in tatters.
Altheim is a small town on the south bank of the river Danube, opposite Passau on the opposite bank. Passau was held by a 9th Bavarian corps. Early in the campaign 1st Austrian corps had taken possession of Altheim and in doing so isolated 9th corps from the remainder of the Bavarian/Baden army commanded by Marshal Oudinot.
The battle of Altheim was fought to allow 9th corps to move south of the river Danube and join Oudinot with the remainder of his army on the southern bank. The failure to take Altheim means that he must abandon Passau and move the garrison west towards Munich, but on the northern bank, in order to cross the river closer to the city.
Only two of the four Austrian corps are currently west of the river Salach, and Oudinot had hoped to crush them before the remainder of the Austrian army could join them. The twin defeats of Mattsee and Altheim have forced him to withdraw his army west towards Munich in order to regroup and concentrate his scattered army.
The Austrians, as always, are slow to take advantage of the enemy disorder. Archduke Charles has ordered his two forward corps to rest and resupply and to await the arrival of his two reserve corps before he moves forward to threaten Munich.