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Siemens says earnings, orders down in first quarter

German engineering giant hoping a shake-up of its businesses would enable it to meet its full-year targets

Gulf News


German engineering giant Siemens said on Wednesday that earnings and orders fell in the first quarter, but it was hoping a shake-up of its businesses would nevertheless enable it to meet its full-year targets.

“In an uncertain economic environment, we got off to a solid start in fiscal 2013,” chief executive Peter Loescher said in a statement.

But he cautioned: “For the rest of the year, we don’t expect any tailwinds from the global economy to help us reach our ambitious goals.”

Siemens, which makes a wide range of different industrial equipment from wind power generators to complete power plants and trains, operates its business year from October to September. And in the first quarter, the three months to December, new orders declined by 3.0 per cent to €19.141 billion ($25.5 billion).

Revenues, on the other hand, edged up by 2.0 percent to €18.128 billion, but net profit fell by 12 percent to €1.214 billion.

Overall underlying profit, which Siemens calculates as “total sectors profit”, rose by 4.0 percent to €1.7 billion, which is equivalent to a profit margin of 9.3 per cent, up from 9.0 per cent in the same quarter a year earlier.

Looking ahead to the full year, Siemens said “the outlook remains unchanged.”

Orders and revenues were projected to show “moderate growth...approaching the level of fiscal 2012.”

Full-year underlying profit was forecast to come in a range of €4.5-5.0 billion, compared with €5.2 billion last year, it added.

That profit target included some €1.0 billion in one-off charges related to the planned shake-up of the group’s businesses.

CEO Loescher said the main focus this year would be to roll out reorganisation measures aimed at lifting the group’s overall profit margin to “at least 12 per cent by fiscal 2014.”

In addition to the targeted acquisition of specialised companies, Siemens has also decided to sell off a number of activities, such as solar energy.

Chief financial officer Joe Kaeser also suggested the group would be in a position to sell off its water treatment activities, as hoped.

Siemens was holding its annual general meeting on Wednesday where, among other items on the agenda, shareholders were to vote on the proposed spin-off of lighting unit Osram.

Siemens shares were among the biggest losers on Frankfurt’s blue-chip DAX 30 index on Wednesday, shedding 1.45 per cent in a generally firmer market.