Siemens, the German industrial company, has released its fiscal third-quarter results. Here’s what you need to know:
Orders
In the three months leading up to June, Siemens received orders worth €24.24 billion ($26.60 billion). This represents a significant 10% increase from the same period last year. Analysts’ expectations for orders were exceeded, as the company saw €22.19 billion in orders – according to a consensus provided by the company.
Revenue
Siemens’ quarterly revenue reached €18.89 billion, showing an increase compared to the previous year. However, the 6% increase fell short of analysts’ expectations. The consensus predicted a group revenue of €19.27 billion.
Net Income
Analysts expected Siemens to report a net profit of €1.41 billion for the quarter, indicating a rebound from the €1.66 billion net loss reported in the prior year. Siemens achieved €1.28 billion in net profit during the third quarter.
Key Observations
- Profitability: Siemens experienced a decline in profitability compared to the previous year. The industrial business profit margin dropped to 15.3% from 17%, reflecting a downturn. Analysts had predicted a slightly higher profit margin of 15.8% based on consensus expectations.
Siemens Reports Steep Decline in Orders
Siemens, a leading company in the digital industries, has reported a significant drop in orders for the quarter. The orders, amounting to EUR4.10 billion, indicate a 37% decline compared to the previous year. This downward trend in orders was observed across all regions, with China experiencing the most notable decline of 61%. However, on a positive note, the revenue from digital industries saw an 8% growth during this quarter.
Lowered Guidance for Fiscal 2023
As a result of these developments, Siemens has revised its fiscal 2023 guidance for the business. Previously raised in May, the company now expects a lower comparable revenue growth between 13% and 15%, down from the earlier projected range of 17% to 20%. Additionally, the profit margin is also adjusted to be in the range of 22% to 23%, compared to the previous range of 22.5% to 23.5%.
Maintaining Targets for Other Businesses
Despite the downgrade in guidance for digital industries, Siemens still maintains its fiscal 2023 targets for its smart infrastructure and mobility businesses, as well as its industrial businesses excluding Siemens Energy. The company continues to guide for group comparable revenue growth of 9% to 11% and a book-to-bill ratio above 1.