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GERMANY-MANUFACTURING-EARNINGS-SIEMENS
Siemens pins hopes on rail as manufacturing gloom hits home
FRANKFURT AM MAIN, Aug 1, 2019 (BSS/AFP) – German industrial conglomerate
Siemens reported Thursday falling profits in its third quarter across most of
its sprawling operations as manufacturers worldwide suffered, but said it
could still reach full-year targets.
Net profit fell six percent year-on-year between April and June, to 1.1
billion euros ($1.2 billion).
But revenues at Siemens, which makes products from wind turbines to trains
and medical scanners, edged up two percent, to 21.3 billion euros, when
adjusted for the effects of its restructuring and exchange rates.
“As indicated already quite some time ago, geopolitics and geoeconomics
are harming an otherwise positive investment sentiment,” chief executive Joe
Kaeser said.
Germany’s mighty industrial sector is suffering a slowdown as uncertainty
over the US-China trade conflict, the risk of a no-deal Brexit and emerging
market volatility weigh on demand.
Manufacturers of goods like cars, auto components and machine tools have
all suffered the effects.
But Kaeser added that a third-quarter bright spot, rail manufacturing, as
well as “stringent project execution” would help Siemens stay on track for
the end of its financial year in September.
Across the group’s divisions, its “digital industries” unit, which offers
factory automation equipment and software, saw operating profit tumble 27
percent.
Meanwhile, the operating result at its power and gas unit, which makes
turbines for gas-fired power stations, dropped by 37 percent.
In June, the Munich-based group announced that job cuts at the division
would mount to more than 8,000 over the coming years “to reduce costs and
adjust to the declining numbers of major projects”.
Siemens’ wind turbine unit Gamesa also saw profits eroded in the third
quarter, leaving its Healthineers medical devices division and rail
manufacturing as the only ones to swell their bottom lines.
The train business secured a 1.2-billion-euro contract for high-speed
trains and maintenance in Russia and another major order for light rail in
San Diego and Portland, Oregon, crowning an overall order book up 18 percent
at almost 3.0 billion.
Looking ahead, Siemens stuck to its forecast of “moderate growth in
revenue”, an adjusted operating margin of 11-12 percent and net earnings per
share between 6.30 and 7.00 euros — “even though it becomes more
challenging”.
BSS/AFP/HR/1415