ZURICH (Multibagger) - Siemens' Revenue Growth Falls Short: CFO Ralf Thomas Signals Potential Dividend Increase Despite Economic Challenges
The German industrial conglomerate Siemens is set to report lower-than-anticipated full-year sales growth, according to Chief Financial Officer Ralf Thomas in an interview published on Friday. Nevertheless, profitability remains robust, and a potential dividend hike is on the horizon.
In its last earnings report on Aug. 8, Siemens had forecasted a full-year comparable revenue growth between 4% and 8%, albeit likely at the lower end of this spectrum.
"The trend is steering away from 4% towards 3% in terms of sales growth," Thomas disclosed to the German newspaper Boersen-Zeitung.
Despite this, Thomas affirmed that the company's profitability is "clearly at the level we announced," with full-year results slated for announcement on Nov. 14.
Previously, Siemens projected full-year earnings per share in the range of 10.40 to 11.00 euros ($11.63-$12.30).
Although Siemens is grappling with a generally weak economic environment, Thomas mentioned that a dividend increase is "probable."
The industrial software and train manufacturing giant faces particularly weak demand for factory automation in China, along with struggles in Italy and Germany.
"Automation really has to stretch itself to achieve its goals," Thomas remarked. "The first half of the next financial year will continue to be a major challenge."
Thomas noted that it will take time for the recent Chinese economic stimulus to show its effects, prompting Siemens to shift its automation business focus more towards the U.S., where demand is on the rise.
"We have a lot of good ideas for the U.S.," Thomas added.
($1 = 0.8940 euros)
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### Siemens' Revenue Growth Falls Short: CFO Ralf Thomas Signals Potential Dividend Increase Despite Economic Challenges
#### Analysis for the Everyday Investor:
1. **Revenue Growth Decline**: Siemens initially projected a revenue growth of 4% to 8% but now expects it to hover around 3%. This means the company is making less money than expected, which might worry some investors.
2. **Stable Profitability**: Despite lower revenue growth, Siemens' profitability remains steady. This is a good sign, indicating the company can manage its operations efficiently even when sales are down.
3. **Potential Dividend Increase**: CFO Ralf Thomas hinted that Siemens might increase its dividend. For shareholders, this means you could receive more money from your investment in Siemens stock.
4. **Economic Challenges**: Siemens faces weaker demand, particularly in China, Italy, and Germany. This could affect future growth prospects, so investors should keep an eye on these markets.
5. **Focus on the U.S. Market**: Siemens plans to pivot more of its automation business towards the U.S., where demand is stronger. This strategic shift could help offset the weaker performance in other regions.
Understanding this breakdown helps you grasp how Siemens' current economic situation and future strategies could impact your investments, making it easier to make informed financial decisions.