 "Siemens profit drops to lowest level since March 2008")
Siemens has reported a sharp 70 percent fall in net profit (standalone) to Rs 70.7 crore for the December-ended quarter, its lowest since March 2008. The profit was much lower than what analysts expected. According to a CNBC TV-18 poll, net profit was estimated at Rs 199 crore. Revenues were also lower by 8 percent at Rs 2,361 crore, again lower than estimated.
“The performance of the company is below our expectations but is in parallel with the economic environment in the country over the past six months, which has been challenging. We witness delays in financial closure of projects and caution in the decision-making process of our customers” said Dr Armin Bruck, managing director, Siemens.
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An important point to note is that the company posted losses in two of its four segments. According to its statement, it incurred a loss of Rs 204.6 crore and Rs 345.6 crore in the energy and healthcare segments, respectively.
However, despite the lower profits, the stock didn’t react too much. It plunged around 3 percent at the time of results, but recovered to close 1.5 percent lower from the previous day’s close.
The only silver lining is the Rs 2,834 crore jump in new order books for the December-ended quarter.
Overall, the company believes that certain developments like the higher IIP index in November 2011, lower inflation and easing of credit rates by the RBI could lead to improved business confidence in the coming quarters.
Siemens AG, the parent company, also reported a 17 percent fall in net profit to $1.89 billion in the last quarter of 2011 due to delays in wind power and rail projects.