Siemens Q4 Profit Down; Sees Earnings Growth In FY14

(RTTNews) - German conglomerate Siemens AG (SI) reported Thursday a decline in the fourth-quarter profit, hurt by charges related to "Siemens 2014" program, as well as negative currency impacts. Looking ahead, for fiscal 2014, the company projects higher earnings per share, but flat organic revenues, as it expects markets to remain challenging.

Joe Kaeser, President and Chief Executive Officer, said, "With a solid fourth quarter, we completed an eventful year in fiscal 2013. Now we're looking ahead and concentrating on measures aimed at improving our profitability, which we are implementing rigorously and prudently."

For the fourth quarter, net income slid 10 percent to 1.068 billion euros (about $1.44 billion) from last year's 1.191 billion euros.

Siemens' Water Technologies Business Unit was classified as discontinued operations effective the latest fourth quarter.

On a continuing operations basis, income declined 13 percent to 1.075 billion euros, and earnings per share fell 11 percent to 1.20 euros. The company cited a 17 percent decline in total sectors profit, which was partly offset by an overall improvement in results outside the sectors.

The latest results were hurt mainly due to 688 million euros in charges for the "Siemens 2014" program.

Adjusted earnings before interest, tax, depreciation and amortization or EBITDA, a key earnings metric, declined 12 percent year-over-year to 2.31 billion euros.

Revenues for the fourth quarter dropped 1 percent to 21.17 billion euros from last year's 21.44 billion euros. Orders declined 1 percent to 21.01 billion euros. Negative currency translation effects took six percentage points from order growth and five percentage points from revenue growth in the quarter, the company said.

On an organic basis, excluding currency translation and portfolio effects, orders and revenue both rose 3 percent.

Among the regions, Europe, the Commonwealth of Independent States, Africa and the Middle East or Europe/CAME reported 2 percent revenue growth, while unfavorable currency resulted in declines in the Americas and Asia, Australia.

The company noted that emerging markets' revenues grew 2 percent, and accounted for 36 percent of total revenue.

Orders in the Americas and Asia, Australia increased, while orders in Europe/CAME declined significantly, due mainly to the lower volume from large orders. Emerging markets' orders climbed 14 percent.

For fiscal 2013, net income grew 3 percent to 4.41 billion euros, revenues declined 2 percent to 75.88 billion euros, while orders rose 8 percent to 82.351 billion euros.

Looking ahead, the company said it expects basic earnings per share for fiscal 2014 to grow by at least 15 percent from 5.08 euros in fiscal 2013, assuming organic revenues to remain stable.

The company added that short-cycle businesses are not anticipating a recovery until late in the fiscal year. The company also projects orders to exceed revenue, for a book-to-bill ratio above 1.

Siemens proposed a dividend of 3 euros per share, unchanged from fiscal 2012.

In Frankfurt, Siemens shares closed Wednesday's trading at 93.99 euros, up 0.99 euros or 1.06 percent.