Siemens 3Q Net Profit Fell as Margins Were Hit by Severance Charges -- Update
01 August 2019 - 8:15AM
Dow Jones News
--Siemens net profit fell 6.7%
--Margins missed consensus, hit by severance charges
--The company confirmed its FY19 guidance
By Nathan Allen
Siemens AG (SIE.XE) said Thursday that net profit fell in the
third quarter of its fiscal year partly due to higher severance
charges, which held back margins.
Net profit at the German engineering group fell to 1.03 billion
euros ($1.13 billion) from EUR1.11 billion a year earlier. Revenue
climbed to EUR21.28 billion from EUR20.47 billion in the quarter
ended June 30, while orders booked over the period grew 8% to
EUR24.51 billion, the company said.
Weaker earnings at Siemens's digital industries and
gas-and-power units offset gains at the group's mobility unit and
health-care subsidiary Siemens Healthineers AG (SHL.XE), the
company said.
Heavy severance charges weighed on Siemens's industrial profit
margin, which declined to 9.6%, undershooting a company-compiled
consensus estimate of 10.8%.
The company is laying off thousands of workers from its
gas-and-power business, which has been struggling for years amid a
broad-based decline in demand for fossil-fuel power generation.
Siemens confirmed its guidance for the year ending Sept. 30, but
said a significant deterioration in the market environment for its
short-cycle businesses will make its target of moderate revenue
growth more difficult to achieve.
Siemens said it expects the adjusted margin on earnings before
interest, taxes and amortization excluding severance charges for
its industrial business to reach the lower half of the targeted 11%
to 12% range.
"A robust mobility sector and stringent project execution will
help us make good on our promises for the year," Chief Executive
Joe Kaeser said.
Write to Nathan Allen at nathan.allen@dowjones.com
(END) Dow Jones Newswires
August 01, 2019 02:00 ET (06:00 GMT)
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