Siemens slides into the red after write-downs and a loss in the supply chain

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Siemens AG posted a loss after impairments as well as charges from ongoing component shortages and pandemic lockdowns in China.

Net income for the fiscal third quarter was minus 1.7 billion euros ($1.7 billion), the company announced on Thursday. That missed analysts’ expectations of a loss of 634 million euros, according to data compiled by Bloomberg.

The German industrial giant said while facing a complex economic environment marked by sanctions on Russia, high inflation and the impact of the pandemic, the company has avoided “major disruption”.

Siemens wrote down the value of its stake in Siemens Energy AG by €2.7 billion in June after the turbine maker repeatedly issued profit warnings. On Thursday, she doubled the provisions related to her exit from Russia to 1.2 billion euros.

Due to the burdens, Siemens lowered the expected increase in earnings per share from previously EUR 9.10 to EUR 5.73. The company stuck to its guidance for revenue growth.

The company, which is still in the process of transitioning its business to higher-margin, software-driven product lines, is facing higher costs from supply chain issues that include chip shortages and higher commodity prices, among others. The company also abandoned its operations in Russia earlier this year, ending a 170-year presence and losing around €4 billion in canceled orders.

Siemens has sold most of the smaller businesses held for sale and is shifting focus to areas with higher growth potential. In recent weeks, the company bought US software company Brightly for $1.6 billion, launched a new digital business platform and acquired a minority stake in Electrify America, the electric car charging subsidiary of Volkswagen AG.

Orders at the Digital Industries unit rose 32 percent, driven by factory automation software and other labor-saving services, while profitability was hampered by semiconductor shortages and higher spending on cloud-based activities, Siemens said. Smart infrastructure orders surged 26 percent even as revenue fell in China due to coronavirus lockdowns. Both units are of central importance for Siemens’ push into higher-margin software offerings.

The Siemens Mobility division, which manufactures trains, received orders worth 2.8 billion euros. Yields fell due to the exit from Russia.

Profit from the industrial business rose to 2.9 billion euros, with the return slightly below analysts’ expectations by 17 percent.

https://www.independent.ie/business/world/siemens-swings-to-loss-after-write-downs-and-supply-chain-drag-41904413.html Siemens slides into the red after write-downs and a loss in the supply chain

Fry Electronics Team

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