ERLANGEN (dpa-AFX) - The medical technology group Siemens Healthineers has made a weaker start to the new fiscal year. The strong euro and US tariffs weighed on the first fiscal quarter (ending in December). However, the results were not as weak as expected. Order intake remained robust. The core imaging business and the new Precision Therapy division, which includes the US cancer specialist Varian, performed well. In contrast, the laboratory diagnostics segment remains weak due to ongoing problems in China. The management team led by CEO Bernd Montag is sticking to its annual forecast.

The DAX-listed share initially opened higher on Thursday, but quickly gave up those gains. Most recently, it was trading about 1.2 percent lower.

One stock trader described the numbers as mixed given the declines. In the core business on a comparable basis, the first quarter was strong, wrote David Adlington of JPMorgan in an initial assessment. However, the diagnostics segment continues to be a drag. The expert highlighted the book-to-bill ratio positively, which reflects the relationship between order intake and invoiced sales.

Group revenue fell by 1.5 percent to 5.4 billion euros last year, the company announced Thursday morning in Erlangen. On a comparable basis—adjusted for currency and portfolio effects—Healthineers achieved a 3.8 percent increase, which was below analysts' expectations. Adjusted earnings before interest and taxes (EBIT) also fell by 1.5 percent to 809 million euros. Adjusted earnings per share dropped by 3.4 percent to 0.49 euros. Here, market experts had expected a larger decline.

Currency effects reduced earnings per share by around four cents. CFO Jochen Schmitz quantified the headwind from tariffs at six cents during a conference call.

Montag described "a very good start" in the core business. The Precision Therapy segment was able to significantly improve its profitability, driven by Varian. However, the adjusted operating margin (EBIT margin) in imaging was reduced by two percentage points due to currency effects and tariffs. Nevertheless, it only deteriorated slightly by 0.3 percentage points, remaining the group's leader at 21.6 percent.

By contrast, laboratory diagnostics remains a problem area for Healthineers. The persistently challenging business in China, where structural upheavals are taking place, is an additional burden. The country has switched to centralized, volume-based procurement as part of its anti-corruption campaign. In addition, reimbursement amounts have decreased. Revenue and profitability fell significantly in this segment; the adjusted operating margin was 2.1 percent, by far the weakest in the group.

Healthineers no longer counts laboratory diagnostics as part of its core business. The division, which has no synergies with the rest of the company, is to be set up independently in the coming years. A possible separation after that remains open.

In the current 2025/26 fiscal year, comparable revenue is expected to increase by five to six percent. With the exception of the laboratory diagnostics business, which is expected to stagnate for the time being, all divisions are expected to grow. CFO Schmitz expects group revenue in the second quarter to develop below the annual forecast. In laboratory diagnostics, the decline is likely to be even greater. Healthineers continues to forecast adjusted earnings per share of between 2.20 and 2.40 euros. In the previous year, it was 2.39 euros.

Meanwhile, preparations for deconsolidation by parent company Siemens are progressing, according to Montag. Healthineers is preparing for the necessary refinancing that could arise from the spin-off.

In mid-November, Siemens announced plans to divest its medical technology subsidiary. In a first step, 30 percent of the DAX-listed company is to be distributed to Siemens shareholders, preferably in the form of a spin-off. Investors had long called for this move, as Healthineers' business has no synergies with Siemens and ties up a lot of capital.

However, the deconsolidation will take time: details still need to be worked out and shareholders of both companies must approve the plan. Siemens recently still held around 67 percent of the Erlangen-based company./nas/stw/stk