Siemens Q4 Profit Rises; Sees Modest Growth In FY18 Revenue

Alicia Farmer
November 9, 2017

Profit at the Power and Gas division, Siemens second biggest after healthcare, plummeted 40% to €303m, including €70m of positive inventory effects.

"Our power and gas division has been struggling for some time with very hard market conditions and structural challenges", Kaeser told a press conference in Munich on Thursday.

Kaeser also admitted that "conglomerates of the old-fashioned kind have no future". The anticipated significant job cuts in Siemens's power-and-gas operations would follow an announcement Monday that the Siemens Gamesa wind-power division plans to shed nearly a quarter of its staff.

Siemens Gamesa is suffering from a slump in demand, especially for large gas turbines. Siemens is about to embark on a restructuring of the unit, according to Reuters.

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"Even in the context of well-flagged conditions" the fourth-quarter earnings report "is likely to be taken poorly", Morgan Stanley analysts said in a note, adding that profit and sales missed consensus estimates.

Munich-based Siemens said Thursday it earned 1.29 billion euros ($1.5 billion) in its fiscal fourth quarter, up from 1.17 billion euros in 2016.

Revenue for the quarter grew 2 percent to 22.30 billion euros from 21.95 billion euros a year ago, for a book-to-bill ratio of 1.06.

Despite problems at the group's power and gas division, its trains, industrial automation and health businesses reported increasing profits.

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