Osram Increases Savings Goal as Profit Misses EstimatesAlex Webb
Osram Licht AG, the world’s second-biggest lighting company, extended a program of job cuts and boosted its savings target by 200 million euros ($267 million) after profit missed analysts’ estimates.
The net loss narrowed to 29.8 million euros in the three months through September from 119.5 million euros a year earlier, the Munich-based former subsidiary of Siemens AG said today. Analysts predicted a net loss of 14.5 million euros. Revenue declined 2.8 percent to 1.3 billion euros.
“We have made significant progress in our company reorganization and execution continues to be ahead of schedule,” Osram Chief Executive Officer Wolfgang Dehen said in a statement. “We also assume that Osram will surpass its earlier-announced 2013 to 2015 cumulative savings target.”
Osram was spun off by Siemens on July 8 as Europe’s largest engineering divests units whose profitability or growth potential it deems inadequate. Osram is shutting or selling 11 of its plants to reach a margin target of more than 8 percent next year.
Annual adjusted earnings before interest, taxes and amortization climbed to 410 million euros from 314 million euros, representing 7.7 percent of the 5.3 billion euros in sales.
Osram shares, up 5.3 percent to 40.22 euros as of 10:07 a.m. in Frankfurt, have jumped about 69 percent since their summer debut, valuing the company at 4.2 billion euros. Siemens CEO Joe Kaeser told journalists last week he has no plans as yet to reduce the 19.5 percent stake that his company has retained in Osram.
Royal Philips NV, the world’s biggest lighting maker, reported adjusted Ebita in the most recent quarter jumped 33 percent to 634 million euros, beating analyst estimates. The Amsterdam-based company is also preparing to extend savings measures as it nears the end of a program to cut 6,700 jobs and trim 1.1 billion euros from costs.
Osram set a new savings goal of 1.2 billion euros by the end of 2015. A planned overhaul of a luminaires and solutions site in Traunreut, Germany and extended measures in North America mean the company now plans a total of 8,700 job cuts, up from an earlier 8,000. Restructuring costs will still total 600 million euros between 2012 and 2014.
Osram had by the end of the fourth quarter sold or closed seven of the 11 factories it plans to divest by the end of 2014, it said today. It has realized 433 million euros of the savings targeted.