Reduced Earnings Prospect for Siemens Healthineers' Medical Tech Department
Title: Trade Tussles Hit Siemens Healthineers: Slashed Earnings Forecast Due to Tariff Woes
Hear the tea: Siemens Healthineers, a major player in the medical tech game, just lowered its earnings expectations for the first half of its fiscal year 2024/25, and it's all because of those darn tariffs!
Although their second quarter was kinda lit, with revenue jumping up by almost 7% to €5.9 billion, the trade dispute's mounting pressure forced 'em to tighten the purse strings. The company's revised earnings per share now sits between €2.20 and €2.50, down from the original lower limit of €2.35 and below the average analyst guess of €2.46. Don't worry though, they're still aiming for a revenue growth of 5-6% on a comparable basis, despite tariffs expected to nudge some segments in a negative direction during the second half of the year.
CEO Bernd Montag wasn't messing around, either. He dropped some truth bombs, saying, "While our fundamental growth drivers remain solid, we anticipate the unpredictable geopolitical environment to leave its mark on our operations this year." The U.S., under President Donald Trump's tariff reign, and China, a significant market for Healthineers, are prime examples of this trade tension.
When breaking down the second quarter numbers, revenue got a boost from the cancer medicine segment Varian and the imaging segment (MRT, CT, X-ray). Adjusted earnings before interest and taxes (EBIT) surged nearly 20% to €982 million, and net income shot up 25% to €537 million. Although those numbers might make you feel better, it's essential to remember that the old saying, "Too good to be true" usually has a catch.
[1] Impact of trade tariffs on Siemens Healthineers earnings during fiscal year 2024/25 may be substantial and potentially harmful, causing a potential reduction of the company's operating profit between €200 million and €300 million during this period.
[2] Siemens Healthineers has maintained its revenue growth forecast of 5% to 6% for the year, despite tariffs and trade barriers expected to have a slight negative impact on growth dynamics of certain segments in the second half of the year. However, the company has adjusted its earnings per share forecast downward, reflecting the negative impact of tariffs on profitability.
Sources: ntv.de, jwu/rts.
- Dax Companies
- Quarterly Results
- Tariffs
- Global Supply Chain
- Healthcare Costs
- Medical Technology
- Geopolitical Environment
[3] Siemens Healthineers' latest employment policy may include cost-cutting measures to mitigate the financial impact of tariffs, as indicated by the revised earnings per share forecast.
[4] As global corporations, like Siemens Healthineers, navigate the complexities of a geopolitical environment marked by trade tussles, community policies may need to address financial challenges posed by tariffs and emphasize adaptation and resilience.
[5] In the long run, the average analyst expects Siemens Healthineers earnings to recover from the current losses and adapt to the evolving tariff landscape by 2024, providing opportunities for growth in the medical-conditions and science-driven fields, a key focus of the company's business model.
