Siemens sees profit, revises Q2 outlook

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Siemens Healthcare has reported slight growth in profit and revenue in all but one division, alhough its imaging and IT division saw a slight downtick in orders, according to its preliminary and unaudited 2009 second quarter financial results.

For the quarter, Siemens profit increased 4 percent to €355 million (U.S. $470 million), compared with €341 million (U.S. $452 million), and a 10 percent increase in revenue to €2.98 billion (U.S. $3.94 billion), compared with €2.95 billion (U.S. $3.9 billion) last year.

Orders overall were up 6 percent, however excluding the benefit of positive currency translation effects, revenue was up 4 percent and orders were up 1 percent. The book-to-bill ratio came in just below 1 and the backlog remained at €7 billion (U.S. $9.27 billion), the company reported.

Imaging & IT saw second quarter profit rise to €265 million (U.S. $351 million) on an increase in profit margin year-over-year. On an organic basis, revenue for the division was up 3 percent while orders declined 1 percent. The company reported that the book-to-bill ratio was 1.

"Tight credit and the economic downturn continued to constrain market growth, particularly in the U.S. and Japan," Siemens said, adding that growth in Asia, Australia, outside of Japan, and in Europe "offset this weakness."

Profit within Diagnostics also rose 10 percent this quarter to €54 million (U.S. $71.5 million), Siemens said. The division's profit margin was reduced by PPA effects of €46 million (U.S. $60.9 million) and integration costs of €17 million (U.S. $22.5 million) associated with acquisitions.

Siemens Workflow & Solutions division reported a 10 percent increase in revenue to €412 million (U.S. $546 million), compared to €376 million (U.S. $498 million) last year. However, for the quarter, the division profit dropped 52 percent to €30 million (U.S. $39.7 million), compared to €63 million (U.S. $83.5 million) last year.

"Challenges related to the macroeconomic and financing environment intensified at Workflow & Solutions. While the division posted higher revenue overall, key solutions businesses experienced revenue declines that reduced their profitability compared to the prior-year period," according to Siemens. "Combined with pricing pressure, this reduced profit and profit margin for the division overall."

Outside its healthcare sector, Siemens AG lowered its fiscal 2009 outlook from a full-year, total sector profit of €8 billion to €8.5 billion (U.S. $10.6 billion to $11.2 billion) to €6.6 billion (U.S. $8.7 billion).

"For fiscal 2009, Siemens targeted revenue growth at least twice the rate of actual global GDP growth. If GDP is negative, this means that a percentage decline in revenue for Siemens would be targeted at less than half the rate of decline in global GDP," the company said.