German engineering conglomerate Siemens today posted strong earnings growth for the quarter ended June 30, with net income up 29 percent over the same period last year, profit from operations up 21 percent and orders up 5 percent.
At the same time, the company also said it now expects to exceed its previous earnings projections for the year.
The growth in net income was led by Siemens Group operations, the company said. In that area, a majority of Siemens’ Groups achieved double-digit earnings growth and higher profit margins compared to the same quarter of fiscal 2003. The top performance there came from Automation and Drives, Power Generation, Medical Solutions, Siemens VDO Automotive, and Osram.
Broader Macroeconomic Environment
“I am pleased about the developments in the third quarter. Order intake is developing well, supported particularly by a very strong June,” Siemens CEO Heinrich v. Pierer said. He added that “net income is progressing ahead of our expectations and should allow us to exceed our own earnings objectives for the full year.”
Pierer noted that the improving economy was a factor in the strong performance. He explained that “These trends show that improvement in the broader macroeconomic environment is now arriving in our industry and that we are succeeding with our enterprisewide initiative, ‘Go for profit and growth.'”
He added, “To ensure our earnings momentum into the next fiscal year, we are targeting further operational improvements by the Groups.”
The Numbers
For its third quarter ended June 30, Siemens reported:
The company, in a statement, said business volume was particularly strong in the closing month of the quarter. It noted that international business drove order growth, rising 16 percent year-over-year. Significantly, reduced capital expenditures for rail transportation projects contributed to an 8 percent decline in orders in Germany year-over-year, according to the statement.
Management Change Confirmed
In another statement issued today, the company confirmed previously announced changes in top management.
Those changes are:
At the same time, the IC Networks and IC Mobile Groups will be merged to form the Siemens Communications Group. The Group’s new board will be made up of Lothar Pauly (president), Thorsten Heins, Michael Kutschenreuter, Andy W. Mattes and Anton Hendrik Schaaf.
As of October 1, the Corporate Executive Committee of Siemens will have the following members:
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