Siemens rolls out sound revenue growth

The German-invested firm reported its revenue in the second quarter rose 9 per cent year-over-year, supported by a strong order backlog. New orders were down 13 per cent.

Income was considerably below the prior year due to burdens in the Power Transmission Division and an equity investment loss at Nokia Siemens Networks, it said.

In addition, there had been an extraordinary gain of €1.5 billion on the sale of Siemens’ stake in Areva NP in the second quarter of 2011.

“As expected, the second quarter was not easy. While we achieved clear growth in revenue, orders came in below the prior year due to lower volume from large orders. For fiscal 2012, we’re on course to achieve our goals for revenue and orders. Profit for the quarter was below our expectation due to charges at power transmission projects in Germany,” said Siemens president and chief executive Peter Löscher.
 
In the second quarter of fiscal 2012, which ended on March 31, 2012, new orders were down 13 per cent year-over-year to €17.9 billion.

“The decline was due primarily to lower volume from large orders compared to the prior-year period. Revenue came in at €19.3 billion – a clear nine per cent increase. The book-to-bill ratio for the quarter was 0.93, and the order backlog totaled €100 billion,” said a Siemens release.

At the energy sector, new orders were down by nearly a third to €5.8 billion, while revenue rose 13 per cent to €6.9 billion. The decline in new orders was primarily due to a lower volume of large orders compared to the prior-year period, which had included orders for a combined cycle power plant in Saudi Arabia and three offshore wind farms in Germany. The largest increase in revenue was achieved by the renewable energy business. For the full fiscal year, the energy sector expects a book-to-bill ratio above one.

At the healthcare sector, new orders totaled €3.2 billion, an increase of four per cent compared to the prior-year period, while revenue grew 8 per cent to €3.4 billion.

At the industry sector, new orders came in at €5.1 billion, slightly above the prior-year figure. Industry sector revenue climbed nine per cent to €5.1 billion. At the new Infrastructure and cities sector, revenue was up 6 per cent to €4.3 billion, while new orders declined 6 per cent to €3.9 billion due to a lower volume of new large orders in the rail business.

“For fiscal 2012 Siemens confirms its expectations of moderate organic revenue growth compared to fiscal 2011, and orders again exceeding revenues for a book-to-bill above 1,” said the release.

It said the company continued to anticipate strong earnings performances in most of its businesses, including its industrial short-cycle businesses. Challenges, mostly in Siemens’ power transmission business, impacted the level of income from continuing operations that the company originally expected to achieve in fiscal 2012, €6.0 billion, by an estimated €0.6 to €0.8 billion. This outlook excluded significant portfolio effects and impacted related to legal and regulatory matters in the second half of the fiscal year.