Siemens, the German industrial conglomerate, is set to announce its fourth-quarter results for fiscal 2023 on Thursday. Here are the key details you need to know:
Revenue
- The company is expected to report fourth-quarter revenue of €20.99 billion ($22.45 billion), according to a company-provided consensus.
- This would be an increase compared to the €20.57 billion revenue reported in the same period last year.
Orders
- Analysts predict a slight decline in orders for the fourth quarter.
- Siemens is expected to report €20.08 billion in new orders, compared to €21.82 billion recorded a year ago.
Industrial Businesses Income
- The profitability of Siemens’ industrial businesses is anticipated to have improved in the last quarter of the fiscal year.
- Analysts estimate an industrial businesses profit of €3.34 billion, with a margin of 16.7%, according to the same consensus.
- In the fourth quarter of fiscal 2022, Siemens reported an industrial businesses profit of €3.16 billion, with a margin of 16.2%.
Net Income
- Analysts forecast that Siemens will achieve a net profit of €1.71 billion for the quarter.
- This would represent a decrease compared to the €2.70 billion reported in the prior year.
What to Watch
Fiscal 2024 Guidance
Siemens, a leading company in the digital-industries and smart-infrastructure sectors, has provided an update on its fiscal 2024 guidance. In the third quarter, Siemens observed a return to normal purchasing behavior among its customers, which impacted the short-cycle businesses within its digital-industries and smart-infrastructure divisions. Concurrently, customers continued to reduce inventory levels due to shorter lead times and improved component availability. This trend is expected to persist in the upcoming quarters.
Notably, the destocking of inventory in China has presented a challenge for Siemens’s digital-industries business. However, analysts at Citi predict a recovery in early 2024. They also anticipate that Siemens will outline positive sales growth prospects for its digital-industries division in 2024.
Siemens Energy: Concerns About Potential Liabilities
Siemens Energy’s recent disclosure of talks with the German government and banks, along with its search for guarantees, has raised concerns about potential liabilities for the company. According to Citi analyst Martin Wilkie, these concerns may be influenced by investor recollection of previous actions taken by Siemens.
In 2005, Siemens provided support to former German employees of its mobile-phone business after it was sold to BenQ Group. This led to the perception of Siemens as a “lender of last resort” for previously owned assets. However, Wilkie believes that the scale and changed nature of Siemens today make the situation with Siemens Energy significantly different.
It is essential to consider the distinctiveness of the Siemens Energy case in light of these previous actions. The company holds a 25.1% stake in Siemens Energy, and its discussions with the German government and banks indicate precautions being taken.
