SIE Stock Down 2%, Siemens Reports Mixed Q4 Earnings Results

UTC by Steve Muchoki · 3 min read
SIE Stock Down 2%, Siemens Reports Mixed Q4 Earnings Results
Joe Kaeser, CEO of Siemens AG. Photo: Siemens

During the past three months, Siemens orders came in at €15.56 billion, whereby the revenue was €15.3 billion.

German multinational industrial manufacturing company, Siemens AG (Xetra: SIE) stocks are down over 2% to trade around €114 as of November 12, 2020, at 12:02 p.m. CEST. This fall is attributed to the mixed Q4 results released by Siemens.

According to the results, Siemens net income rose by 28% year over year to 1.9 billion euros. The spike in income was due to higher income from discontinued operations that includes pre-tax gain from the spin-off of Siemens Energy.

However, the company’s orders and revenues were largely impacted by the negative currency translation effects during the height of the coronavirus pandemic.

Other Siemens Q4 Results

Notably, in Q4 Siemens adjusted EBITA for the industrial businesses shot by 10% to €2.6 billion. The company attributed this to a strong performance in the software business and more so to positive effects from its stake in Bentley systems.

Speaking to media outlet CNBC, CEO, Joe Kaeser said he was ‘very satisfied’ with the results. Apparently, this was his last quarterly results before he steps down as the company’s CEO. He insisted that the strong euro against the dollar significantly affected the exporters during the fourth quarter. “We must not forget that the currency impact has been significant in the fourth quarter, mostly due to the U.S. dollar/euro relations,” he said.

During the past three months, Siemens orders came in at €15.56 billion, whereby the revenue was €15.3 billion. Hence a 2% spike in orders on a comparable basis.

According to Kaeser, by the orders being up 2% year over year pre-covid is not a bad thing for the company.

Future Prospects

Although the company made it through the first wave of coronavirus, there is a lot of uncertainty as numbers lead to a possible second wave of infection in Europe.

However, the company is optimistic and believes that during the 2021 fiscal year the revenues will rise moderately. This is despite the fact that there may be significant burdens from currency translation effects. Siemens further noted that the negative currency effects will strongly burden both nominal growth rates in volume and Adjusted EBITA for Siemens’ Industrial Businesses in fiscal 2021.

Apparently, the company noted that it is paying €200 million bonuses to all its employees worldwide. In addition, the company’s board is proposing a dividend payment of €3.5 per share, which will be €0.4 lower than last year’s payout.

According to the market analysis provided by MarketWatch, Siemens stocks are up approximately 9.33% year to date. In addition, they have jumped 8.49%, 5.05%, and 4.34% in the last three months, one month and five days respectively. The company has a market valuation of €96.23 billion.

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Steve Muchoki
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