Industrial goods manufacturer
) reported third quarter fiscal 2013 net income of $1,433.5
million (€1,098 million) or $1.65 per share (€1.26) compared with
$1,005.3 million (€770 million) or $1.10 per share (€0.84) in the
year-earlier quarter. Although earnings per share increased on a
year-over-year basis, it missed the Zacks Consensus Estimate of
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Total revenue in the reported quarter declined 1.5% year over
year to $25.1 billion (€19.2 billion), primarily due to drop in
revenues from the Energy and Industry segments. On a regional
basis, revenues decreased significantly in the Americas owing to
weak wind power markets in the U.S.
However, orders improved 19% year over year to $27.6 billion
(€21.14 billion) as Siemens won major long-cycle contracts for
trains and maintenance. The book-to-bill ratio for the quarter
was 1.10, while order backlog stood at a record high of $133.17
billion (€102 billion) at quarter-end.
sector, Siemens recorded a 5.5% year-over-year decline in
revenues to $8.6 billion (€6.6 billion) due to lower
contributions from all sub-segments. On a geographic basis,
revenues declined considerably in the Americas, but increased in
Asia and Australia, and were relatively flat in Europe/ CAME
(Europe, the Commonwealth of Independent States, Africa and the
Middle East). The segment profit for the reported quarter was
down 37.0% year over year to $561.4 million (€430 million). The
decline in sector profit was largely due to charges of $133.17
million (€102 million) under the "Siemens 2014" program, which is
intended to reduce the sector's cost structure, adjust capacity
and optimize regional footprint in accordance with demand.
Segment profit was also held back by $118.8 million (€91 million)
in charges in the Wind Power Division, related to inspection and
retrofitting of onshore turbine blades in the U.S.
sector profit increased 26.0% to $651.5 million (€499 million)
driven by improvements in cost structure resulting from its
ongoing Agenda 2013 initiative as well as lower charges
associated with this initiative. Revenues improved 0.7% year over
year to $4.4 billion (€3.4 billion) driven by a healthy
contribution from the imaging business. On a geographic basis,
revenues were up in Asia-Australia and Europe/CAME, and down in
sector, revenues were down 2.2% year over year in the quarter to
$6.5 billion (€5.0 billion) due to lower top-line growth in all
geographic regions. Orders rose in Europe/CAME, Asia and
Australia but declined in the Americas. Sector profit plunged
33.6% year over year to $453.0 million (€347 million) due to
$182.8 million (€140 million) charge associated with "Siemens
2014" program that aims to reduce costs related with
administrative processes and improve the sector's global
Infrastructure & Cities
sector recorded a 4.3% year-over-year improvement in revenues as
all sub-segments except Building Technologies reported healthy
businesses. On a geographic basis, revenues were up in Asia,
Australia and Europe/CAME and down in the Americas. Sector profit
plummeted a staggering 107% year over year to a loss of $19.6
million (€15 million) as the company recorded $235.0 million
(€180 million) in charges due to "Siemens 2014" program.
Balance Sheet and Cash Flow
In the reported quarter, free cash flow from continuing
operations was $1,270.3 million (€973 million). Net cash from
operating activities at quarter-end stood at $1,793.9 million
Cash and cash equivalents at quarter-end were $7,926.3 million
(€6,071 million), while long-term debt was $24.9 billion (€19.1
In fiscal 2013, Siemens is implementing a company-wide program
titled "Siemens 2014". The program is designed to support a
uniform single framework for sustainable value creation.
For fiscal 2013, the company expects to record €1.0 billion in
charges for this program. Income from continuing operations for
fiscal 2013 is expected to be €4.0 billion, down from the
previously guided figure of €4.5 billion.
Siemens presently has a Zacks Rank #5 (Sell). Other players in
the industry worth reckoning include
Koninklijke Philips N.V
Universal Electronics Inc.
), each carrying a Zacks Rank #2 (Buy).
Note: 1 € = $1.3056 (period average from Apr 1, 2013 to Jun
One Siemens ADR
corresponds to one Siemens share.