Frankfurt: German industrial conglomerate Siemens AG said on Tuesday its fiscal first quarter net income rose by 24% to €1.5 billion ($2.12 billion) while some of its businesses saw stabilizing demand.
Siemens, based in Munich, reported net income of €1.2 billion for the same quarter a year ago. The company’s fiscal year begins in October.
The company reported that revenue for the period, however, fell 12% to €17.4 billion from €19.6 billion a year ago.
Siemens, which builds products ranging from light bulbs to high-speed
trains, said its orders of near €19 billion were 15% lower than the year-earlier period and included the expected contraction in industrial and energy infrastructure markets that typically lag behind macroeconomic cycles.
“Siemens anticipates that conditions in the manufacturing sector and world financial markets will remain challenging in fiscal 2010,” Siemens said in its report.
“Following a double-digit decline in orders in fiscal 2009, we expect only a mid-single-digit percentage decline in organic revenue in fiscal 2010 due to the stabilizing effect of our strong order backlog. We expect total sectors profit between €6 and €6.5 billion in fiscal 2010, and an increase of approximately 20% in income from continuing operations compared to €2.5 billion in the prior year.”
Analysts surveyed by Thompson Reuters expected Siemens to report net income of €1.1 billion and revenue of €18.4 billion.
In a recent research note, Bernstein analysts said Siemens’ recent corruption scandal and the recession passing are catalysts for future progress. Bernstein said other positives at the company include underlying operating performance, a portfolio restructuring to less-cyclical business, and clean energy growth potential. Bernstein rates Siemens at “Outperform” with a target of euro73.
Shares of Siemens closed about a quarter percent lower at €64.60 in Monday trading.