Siemens AG (SI) reported earnings per share from continuing operations of €1.53 ($1.89 per ADR) for the first quarter of fiscal 2012 compared with €2.07 per ADR in the year-ago quarter. Profitability was primarily impacted by project delays in some businesses, such as power transmission and rail systems, which led to significant charges. Quarterly earnings were well below the Zacks Consensus Estimate of $2.70 and were also lower year over year.
Revenue
Revenue for the first quarter grew 2% year over year to €17.9 billion ($24.2 billion) driven by increases in all reporting regions and 8% growth in emerging markets. Organic revenue for the quarter grew 3% year over year.
Orders for the quarter grew 5% to €19.8 billion ($26.7 billion). The book-to-bill ratio for the quarter was 1.11 and the order backlog reached a new high at €102 billion.
Sectoral and Regional Performance
The company has three operating sectors: Industry, Energy and Healthcare.
During the quarter, only Healthcare posted an order growth of 4% while the other two sectors posted declines compared to the prior-year quarter.
On a geographic basis, orders grew 3% in the Americas but declined 9% in Asia and Australia and 8% in the region comprising Europe, the Commonwealth of Independent States, Africa and the Middle East (Europe/CAME). However, emerging markets showed more strength than orders overall, declining only 3% and accounting for 36% of total orders for the quarter.
Income and Expenses
In the first quarter, Total Sectors profit declined 23% to €1.6 billion, down from €2.1 billion a year earlier. The decline was primarily due to project charges in Energy and Infrastructure & Cities. In addition, Healthcare took charges related to its two-year initiative “Agenda 2013” to increase competitiveness and innovation. Total Sectors profit was further impacted by higher functional costs in all Sectors associated with growth, and by increased pricing pressure in renewable energy.
Cash Flow
During the first quarter of 2012, the company had a negative free cash flow of €128 million compared to a positive €1.489 billion in the prior-year quarter.
Siemens currently holds a Zacks Rank # 3 which implies a short term ‘Hold’ rating.
SIEMENS AG-ADR (SI): Free Stock Analysis Report
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