German industrial conglomerate Siemens AG reports its results for the last quarter of 2009, which the company counts as its fiscal first quarter, on Tuesday. The following is a summary of key developments and analyst commentary related to the period.
OVERVIEW: Siemens, which makes products ranging from light bulbs to high-speed trains, also has a large number of products in what it calls the environmental portfolio, including solar and wind energy products. Environmental portfolio have been selling particularly well amid concerns about global warming and energy efficiency.
In November, the company said it increased revenue in the environmental portfolio to €23 billion ($34.5 billion) in 2008-2009 from the round €20 billion in the last fiscal year. Siemens fiscal year begins in October.
The company has said it expects governments of the world's 20 largest economies to spend about $430 billion over the next several years to improve infrastructure such as power grids and transportation networks. Siemens said its environmental portfolio revenue could surpass €25 billion by 2011 as a result.
BY THE NUMBERS: Analysts surveyed by Thompson Reuters expect Siemens to report net income of €1.1 billion ($1.55 billion) compared with a net income of €1.2 billion in the fiscal first quarter of 2009. Analysts expect revenue to fall to €18.4 billion compared with nearly €20 billion in the year-ago quarter.
ANALYST TAKE: Sanford C. Bernstein analysts said Siemens' recent corruption scandal and the easing of the recession are catalysts for future progress. Bernstein said other positives at the company include underlying operating performance, a portfolio restructuring to less-cyclical business, and clean energy growth potential. Bernstein rates Siemens at "outperform" with a target of €73.
WHAT'S AHEAD: Observers will continue to look at the effects of the global downturn on Siemens' business and how the environmental portfolio contributes to the company's revenue and earnings.
Observers will also be looking at Siemens' participation in Desertec — a consortium of European and African companies that hope to build a vast solar electric network across North Africa and the Middle East. The project could provide an enormous amount of work to Siemens and eventually supply power to that region and 15 percent of the energy needs of Europe by 2050.
STOCK PERFORMANCE: Siemens shares are trading around €66, near their 52-week highs. The shares' 52-week low around €40 was set in the winter of 2009.
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