In This Article:
When Siemens Limited (NSEI:SIEMENS) announced its most recent earnings (30 September 2017), I did two things: looked at its past earnings track record, then look at what is happening in the industry. Understanding how Siemens performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see SIEMENS has performed. View our latest analysis for Siemens
How Did SIEMENS’s Recent Performance Stack Up Against Its Past?
I prefer to use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This technique allows me to analyze various companies on a similar basis, using the latest information. For Siemens, its most recent earnings (trailing twelve month) is ₹11.37B, which, relative to last year’s figure, has sunken by a non-trivial -60.58%. Given that these values may be fairly nearsighted, I have estimated an annualized five-year value for Siemens’s net income, which stands at ₹6.54B This means despite the fact that earnings declined against last year, over the longer term, Siemens’s profits have been rising on average.
How has it been able to do this? Let’s see if it is solely because of industry tailwinds, or if Siemens has seen some company-specific growth. In the last couple of years, Siemens grew bottom-line, while its top-line declined, by successfully managing its costs. This brought about to a margin expansion and profitability over time. Scanning growth from a sector-level, the IN industrials industry has been relatively flat in terms of earnings growth over the past couple of years. This shows that any near-term headwind the industry is enduring, it’s hitting Siemens harder than its peers.
What does this mean?
Siemens’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that are profitable, but have capricious earnings, can have many factors impacting its business. You should continue to research Siemens to get a more holistic view of the stock by looking at:
-
Future Outlook: What are well-informed industry analysts predicting for SIEMENS’s future growth? Take a look at our free research report of analyst consensus for SIEMENS’s outlook.
-
Financial Health: Is SIEMENS’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
-
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 September 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.