Siemens posts Q1 profits, buoyed by imaging, IT

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Siemens Healthcare posted higher-than-expected profits in the fiscal first quarter of 2009, which ended Dec. 31, 2008, compared to the fiscal first quarter of 2008.

According to Siemens, its 2009 first quarter healthcare sector profit increased to €342 million ($449.44 million U.S.), compared to profits of €332 million ($436.2 million U.S.) for the year-ago first quarter.

The company said its healthcare sector “continued to compete successfully in a challenging environment, as slower growth and tighter credit conditions spread beyond the United States to other regions.”

Within the healthcare sector, the imaging & IT division was one of Siemens’ most profitable contributors in the first quarter of 2009. The company said that the division increased its 2009 first quarter profit by 13 percent year-over-year, to €262 million ($343.96 million U.S.). However, Siemens noted that the “overall medical imaging market in the United States remains challenging, with demand limited by tight credit and the Deficit Reduction Act (DRA).” Yet, the imaging & IT division achieved a 7 percent rise in revenue and a 1 percent increase in orders. On an organic basis, the company reported that revenue was up 4 percent and orders were 2 percent below the level of the prior-year period.

The diagnostics division recorded a total of €66 million ($86.68 million U.S.) in Pension Protection Act (PPA) effects and integration costs associated with acquisitions, including Dade Behring. Overall, Siemens reported that diagnostics contributed €83 million ($109 million U.S.) to sector profit in the first quarter, up from €67 million ($88 million U.S.) in the same quarter a year earlier. For comparison, that prior-year period included only two months of income from Dade Behring. PPA effects and integration costs related to acquisitions reduced diagnostics’ profit margin by approximately 760 basis points in the current quarter, including PPA effects of €46 million ($60.4 million U.S.) and integration costs of €20 million ($26.27 million U.S.).

“Siemens got off to a good start in fiscal 2009,” commented Siemens CEO Peter Löscher. “Total sectors’ profit clearly exceeded the prior-year level. Therefore we are sticking to our 2009 targets, even though reaching them has become more ambitious. While we are closely monitoring market conditions on a quarterly basis, we are progressing through the year strong, confident and focused.”