Back to top

Analyst Blog

Industrial goods manufacturer Siemens AG reported second quarter fiscal 2013 net income of $1.36 billion (€1.03 billion) or $1.56 per share (€1.18) compared to $1.24 billion (€0.94 billion) or $1.35 per share (€1.02) in the year-earlier quarter. Although earnings increased on a year-over-year basis, it missed the Zacks Consensus Estimate of $1.92.

Total revenue in the reported quarter declined 7% year over year to $23.79 billion (€18.01 billion), primarily due to 4% year-over-year drop in revenues from the emerging markets as weak investor sentiments continued due to challenging macroeconomic environment. On a regional basis, revenues decreased significantly in the Americas and moderately in the region comprising Europe, the Commonwealth of Independent States, Africa and the Middle East (Europe/CAME) and in the Asia, Australia region. However, orders improved 3% year over year to $28.33 billion (€21.45 billion) as Siemens won major long-cycle contracts for wind power and trains. The book-to-bill ratio for the quarter was 1.19, while order backlog stood at $133.39 billion (€101 billion) at quarter-end.

Segment Results

In the Energy sector, Siemens recorded a 9% year-over-year decline in revenues due to lower Fossil Power Generation and Wind Power revenues. On a geographic basis, revenue decreased considerably in the Americas. The segment profit for the reported quarter was down 4% year over year to $727.71 million (€551 million).

Healthcare sector profit increased 4.9% to $587.71 million (€445 million) led by commendable performances in the imaging and therapy systems businesses. Revenues declined 2% year over year, driven by lower revenues from Europe/ CAME and the Americas.

In the Industry sector, revenues were down 9% year over year in the quarter due to lower top-line growth in all geographic regions. Sector profit plunged 47% year over year to $432.24 million (€350 million) due to lower capacity utilization and a less favorable business mix.

Infrastructure & Cities sector recorded a 5% year-over-year revenue decline as both Europe/CAME and the Americas posted lower revenues. Sector profit plummeted a staggering 90% year over year to $35.66 million (€27 million) due to higher project charges in the Transportation & Logistics division.

Balance Sheet and Cash Flow

In the reported quarter, free cash flow from continuing operations was $1.82 billion (€1.375 billion). Siemens raised new long-term debt aggregating $4.62 billion (€3.5 billion), denominated in both euros and the U.S. dollar, with maturities ranging from 2018 to 2028.

Cash and cash equivalents at quarter-end were $10.42 billion (€7.89 billion) while long-term debt was $26.65 billion (€20.18 billion).

Outlook

In fiscal 2013, Siemens is implementing a company-wide program titled “Siemens 2014” to support a uniform single framework for sustainable value creation. Income from continuing operations in fiscal 2013 is expected to be €4.5 billion.

Siemens presently has a Zacks Rank #3 (Hold). Other players in the industry worth reckoning include Cubic Corporation (CUB - Snapshot Report), Universal Electronics Inc. (UEIC - Snapshot Report), and Analogic Corporation (ALOG - Snapshot Report), each carrying a Zacks Rank #2 (Buy).

Note: 1 € = $1.3207 (period average from Jan 1, 2013 to Mar 31, 2013)

         One Siemens ADR corresponds to one Siemens share.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
PLANAR SYST… PLNR 4.44 +5.21%
BITAUTO HOL… BITA 81.71 +5.12%
CTPARTNERS… CTP 16.66 +4.26%
CHINA BIOLO… CBPO 47.91 +3.30%
MALLINCKROD… MNK 72.94 +2.85%