Siemens Q1 Profit, Orders Climb; Backs FY14 Earnings Growth View

(RTTNews) - German conglomerate Siemens AG (SI) reported Tuesday a strong growth in its first-quarter earnings, mainly reflecting a strong performance in Infrastructure & Cities as well as the absence of prior year's charges. Revenues were hurt by negative currency impacts, while large orders were boosted by higher volume. Looking ahead, the company backed its forecast for earnings growth in a challenging fiscal 2014.

President and Chief Executive Officer Joe Kaeser said, "We delivered a sound quarter to start our fiscal year. As expected, market conditions were not in our favor. We continue to focus on our productivity program for the year, and on the actions we will take beyond 2014."

For the first quarter, net income increased 20 percent to 1.46 billion euros from 1.21 billion euros a year ago. Excluding discontinued operations due to the sale of the Water Technologies Business Unit, income from continuing operations rose 21 percent year-over-year to 1.39 billion euros.

Total sectors profit rose 15 percent to 1.79 billion euros. Healthcare and Industry segments generated lower profit, burdened by negative currency effects, which are expected to continue.

Adjusted earnings before interest, tax, depreciation and amortization or EBITDA, a key earnings metric, grew 9 percent from last year to 2.45 billion euros.

In the quarter, revenue dropped 3 percent to 17.33 billion euros from 17.93 billion euros a year ago. The company noted that the currency impacts took four percentage points from revenue development. On an organic basis, excluding currency translation and portfolio effects, revenue edged down 1 percent.

On a geographical basis, revenue declined in the Americas and in the region comprising Europe, the Commonwealth of Independent States, Africa and the Middle East or Europe/CAME, while Asia, Australia was benefited by a double-digit increase in China. Emerging markets' revenues dropped 4 percent, while organic revenue growth was 1 percent.

Orders, however, grew 9 percent to $20.84 billion euros from $19.17 billion euros in the prior year. Orders on an organic basis were up 12 percent. Orders from emerging markets grew 21 percent, representing 41 percent of total orders. The order backlog for the sectors reached 102 billion euros.

Looking ahead for fiscal 2014, the company said it continues to expect markets to remain challenging in fiscal 2014, and that its short-cycle businesses are not anticipating a recovery until late in the fiscal year.

For the year, the company still expects basic earnings per share to grow by at least 15 percent from 5.08 euros in fiscal 2013 and organic revenue to be flat, while orders to exceed revenue, for a book-to-bill ratio above 1.

In a separate press release, Siemens said that it is planning to delist its American Depositary Receipts or ADR from the New York Stock Exchange. The company also plans to terminate its reporting obligations (deregistration) to the American Securities and Exchange Commission. The Managing Board has made this decision in its meeting on January 27.

According to the company, the goal of the delisting and deregistration is to address the change in the behavior of its investors.

Siemens shares closed Monday's trading at $132.34, up $1.67 or 1.28 percent.