Siemens Healthineer says that comparable sales fell 2% in the fourth quarter.
The German company reports a 20% decline in fourth quarter operating profit.
The medical device company’s free cash flow jumped 12% to £638.87 million in the fourth quarter.
In an announcement on Monday, Siemens Healthineers (ETR: SHL) said that comparable revenue in the fourth quarter of the fiscal year was down 2% year-on-year. Operating income of £564.88 million in the fourth quarter was down 20% year-on-year as the ongoing COVID 19 crisis depressed demand for routine healthcare testing.
The company’s shares traded about 2.5% higher in pre-trade trading on Monday. However, the stock lost all of its intraday gains when the market opened. As a result of the COVID-19 disruption, Siemens Healthineers now has a price per share of £33.32 compared to £28 per share in March. Trading shares online is easier than you might think. Learn how to buy shares online in 2020.
Siemens Healthineers’ free cash flow jumps 12% in Q4.
According to Siemens Healthineers, the coronavirus pandemic has led to an increase in research spending in recent months. Diagnostic costs also jumped in the fourth quarter, the company added. According to Siemens Healthineers, free cash flow rose by 12% to £638.87 million in the fourth quarter.
Analysts had forecast an EBIT (earnings before interest and taxes) of 581.12 million pounds sterling for the medical technology company for the past quarter. In the same quarter of the previous year, Siemens Healthineers had recorded an EBIT of £706.55 million. In the first week of August, its parent company, Siemens AG, published better financial results for the third quarter than expected.
For the full year, Siemens Healthineers now forecasts revenue growth of 5% to 8%. In addition, the company is targeting adjusted earnings per share of up to £1.55 for the current fiscal year. The forecast is based on the assumption that the COVID 19 crisis will not force governments to implement a further lockdown.
Siemens Healthineers to acquire Varian Medical Systems
In September, the German company launched its rapid antigen test kit for the detection of COVID-19 in Europe. In August, Siemens Healthineers announced plans to acquire Varian Medical Systems (U.S. specialist for radiotherapy) for £14.80 billion. According to the Chairman of the Supervisory Board of Siemens Healthineers, Prof. Dr. Ralf P. Thomas, the acquisition of Varian Medical Systems (U.S. specialist for radiation therapy) was announced for £14.80 billion:
“With the acquisition of Varian, Siemens Healthineers is entering another attractive growth market that offers the company considerable potential for value creation and fits perfectly into the upgrade phase of Siemens Healthineers’ strategy. Siemens Healthineers is creating an unprecedented, highly integrated portfolio for the global fight against cancer,” said Ralf P. Thomas.
At the time of writing this report, Siemens Healthineers is valued at £35.83 billion and has a price-earnings ratio of 25.05.