Management does not see any long run impact from the coronavirus: Siemens Healthineers also has factories in China that could potentially be disrupted by the coronavirus. ![]() The company's top line growth remains impressive, yet the margin erosion is a cause for concern. For now, as Imaging goes so goes Siemens Healthineers. Imaging represented over 75% of the company's total segment EBIT. If the margin erosion continues at Imaging, it could have an out-sized impact on total earnings. ![]() The margin dip at Diagnostics may have been a one-off event. The EBIT margin for Diagnostics fell due to costs associated with the rollout of Attellica Solution, which was designed to help drive better outcomes in clinical labs. EBIT margin for Imaging fell 250 basis point due to negative mix. On a segment basis, margins fell for each of the company's operating segments. EBITDA margin of 17.2% was down 180 basis points, causing EBITDA to fall 2% Y/Y. On a dollar basis, gross profit fell 17% Y/Y. Gross margin was 38.1%, down 230 basis points versus the year earlier period. Revenue growth was solid, yet margins fell sharply. Such headwinds may not have impacted their European counterparts in the same way. may have been negatively affected by the trade war between the U.S. It seems to support the narrative that certain healthcare organizations in the U.S. This was a sea change compared to Danaher ( DHR), which experienced softness in China. Siemens Heathineers also experienced double-digit growth in China. Overall, it was a solid quarter pursuant to revenue. The segment represented only 11% of total revenue, so its outsized growth had less of an impact than other segments. Revenue from Advanced Therapies was EUR 404 million, up by double digits. The segment carried over momentum from the previous quarter. Diagnostics revenue was EUR 1.0 billion, up 5% Y/Y. The segment experienced strong growth in X-ray products, molecular imaging and Magnetic Resonance. It was the company's largest segment at 61% of revenue, so its double-digit growth was important. Revenue from Imaging was EUR 2.2 billion, up 10% Y/Y. Segment revenue (prior to inter-company eliminations) was up 9% Y/Y. Each of the company's three major operating segments generated revenue growth. Aging demographics, population growth and increase in chronic diseases should allow the company to enjoy outsized growth. Siemens Healthineers makes imaging, ultrasound, and software products for the healthcare field. It has likely been negatively impacted by the global selloff related to the coronavirus. The stock is down about 5% since its earnings announcement. ![]() Siemens Healthineers ( OTCPK:SMMNY) ( OTCPK:SEMHF) reported quarterly revenue of EUR 3.59 billion, non-GAAP EPS of EUR 0.35, and GAAP EPS of EUR 0.30.
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