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MarketScreener Homepage  >  Equities  >  Tokyo Stock Exchange  >  Mitsubishi Heavy Industries, Ltd.    7011   JP3900000005

MITSUBISHI HEAVY INDUSTRIES, LTD.

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Germany's Siemens, bucking trend, sees moderate growth next year

11/08/2018 | 06:29am EST
FILE PHOTO: The Siemens logo is seen on a building in Siemensstadt in Berlin

MUNICH (Reuters) - Siemens bucked the trend of boardroom caution when it said on Thursday it expects to shrug off global geopolitical tensions and notch up "moderate" sales growth next year.

Chief Executive Joe Kaeser described the German engineering company's guidance as "courageous", saying it saw only limited risks and expected to increased sales in the 3 to 5 percent range during its 2019 fiscal year, which began on Oct. 1.

The outlook was for "moderate growth", he told Reuters TV after the company reported better-than-expected fourth-quarter earnings.

"The capital markets would likely interpret that as growth of between 3 and 5 percent," he said.

The train-to-turbine maker's shares rose 1.1 percent in early trading, bolstered by a new 3 billion euro ($3.43 billion) share buyback.

"If everybody is concerned, there has to be somebody who brings hope and shows people the way. This is not arrogant ... Our customers like what we do," Kaeser said.

Many companies have voiced worries about slowing growth as trade tension between the United States and China mounts and economies in many countries ebb.

Chief Financial Officer Ralf Thomas told an analysts' call however that Siemens had good visibility for the first six months of its business year, and had not seen any negative indicators stemming from geopolitical tensions hitting its smaller and shorter-term projects.

Despite the upbeat comments, investment research firm CFRA cut its rating on the shares to 'hold' from 'strong buy'.

"We think its outlook statement points to a tougher operating environment in FY19, on the back of rising macroeconomic uncertainties and geopolitical tension," CFRA equity analyst Firdaus Ibrahim said in a note.

Siemens' confidence contrasts with the troubles at its U.S. rival General Electric which last month slashed its dividend, said it faces a deepening federal accounting probe and vowed to restructure its power unit.

RIVALS' WOES

Shares in Siemens' Swiss rival ABB hit a nearly two-year low last month after the group reported third-quarter results. ABB turned more cautious on its European outlook, citing concerns about Italy and Britain.

Caterpillar Inc tried to ease mounting concerns about China and global demand last month after it affirmed its 2018 profit estimate, a move that investors feared signalled a cap in earnings growth and sparked a sell-off in its shares.

Kaeser, who is reorganising Siemens to simplify its structure and speed up growth, was particularly buoyed by the strength in Siemens' short-cycle businesses like its Digital Factory automation unit, the jewel in its crown.

During the three months ended Sept. 30, the division raised revenue by 10 percent and profit by 28 percent, helped by sales of its software business which controls industrial processes in factories.

Kaeser said he thought the business could continue to grow even in uncertain times and take market share.

But the Power and Gas business remained a sore spot, swinging to a loss of 139 million euros during the quarter as the collapse in demand for large gas-powered turbines persisted and it was hit by charges from cutting jobs.

The business, which competes with General Electric and Mitsubishi Heavy Industries, has also seen falling prices due to over-capacity in the sector.

In September, Siemens said it would cut around 2,900 jobs in Germany to achieve 500 million euros in cost savings to improve the competitiveness of its Power and Gas division and the Process Industries and Drives division.

The overhaul triggered 301 million euros in restructuring charges which weighed on the Siemens's industrial profit, which remained flat at 2.145 billion euros.

Siemens' results were also hit by a one-off tax charge related to the separation of its mobility unit. Siemens is seeking approvals from competition authorities to combine the train business with France's Alstom.

As a result, net profit fell 46 percent to 681 million euros, better than the 595 million euros expected in a Reuters poll.

Siemens proposed raising its dividend. Kaeser said its new share buyback would not prevent future acquisitions.

(Reporting by John Revill; Editing by Maria Sheahan and Adrian Croft)

By John Revill


© Reuters 2018
Stocks mentioned in the article
ChangeLast1st jan.
ABB LTD -0.63% 26.61 Delayed Quote.8.38%
ALSTOM -3.75% 43.83 Real-time Quote.-2.30%
AMP LIMITED -0.32% 1.55 End-of-day quote.-0.64%
CATERPILLAR INC. -3.65% 180.49 Delayed Quote.2.92%
DEERE & COMPANY -5.64% 279.62 Delayed Quote.10.83%
GENERAL ELECTRIC COMPANY -2.57% 11.015 Delayed Quote.4.54%
HOPE, INC. 7.36% 3165 End-of-day quote.-29.59%
JUST GROUP PLC -1.13% 74.15 Delayed Quote.7.30%
MITSUBISHI HEAVY INDUSTRIES, LTD. 1.02% 3158 End-of-day quote.0.06%
SIEMENS AG -1.01% 129.34 Delayed Quote.11.18%
SWISS RE LTD -0.82% 79.78 Delayed Quote.-3.48%
THE GLOBAL LTD. 2.02% 253 End-of-day quote.-2.69%
WILL GROUP, INC. 4.97% 1057 End-of-day quote.5.07%
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Financials
Sales 2021 3 685 B 35 391 M 35 391 M
Net income 2021 15 089 M 145 M 145 M
Net Debt 2021 1 330 B 12 775 M 12 775 M
P/E ratio 2021 51,4x
Yield 2021 2,40%
Capitalization 1 051 B 10 104 M 10 099 M
EV / Sales 2021 0,65x
EV / Sales 2022 0,62x
Nbr of Employees 81 631
Free-Float 91,4%
Chart MITSUBISHI HEAVY INDUSTRIES, LTD.
Duration : Period :
Mitsubishi Heavy Industries, Ltd. Technical Analysis Chart | 7011 | JP3900000005 | MarketScreener
Technical analysis trends MITSUBISHI HEAVY INDUSTRIES, LTD.
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 10
Average target price 2 946,00 JPY
Last Close Price 3 129,00 JPY
Spread / Highest target 14,4%
Spread / Average Target -5,85%
Spread / Lowest Target -16,9%
EPS Revisions
Managers and Directors
NameTitle
Seiji Izumisawa President, CEO, Director & Chief Strategy Officer
Shunichi Miyanaga Chairman
Hisato Kozawa CFO, Representative Director & Executive Officer
Michisuke Nayama Chief Technology Officer & Executive VP
Eisaku Ito CTO, Executive Officer & GM-ICT Solutions
Sector and Competitors
1st jan.Capitalization (M$)
MITSUBISHI HEAVY INDUSTRIES, LTD.0.06%10 084
HONEYWELL INTERNATIONAL INC.-5.47%141 081
SIEMENS AG11.18%126 996
3M COMPANY0.66%101 655
GENERAL ELECTRIC COMPANY4.54%98 899
ILLINOIS TOOL WORKS INC.-2.05%63 212