NEW YORK — Following extraordinary demand for rapid COVID-19 antigen testing in 2021, Siemens Healthineers reported on Wednesday that the company's fiscal third quarter COVID-19 testing revenue declined sharply, leading to a 24 percent drop in diagnostics income year-over-year.
The Erlangen, Germany-based firm reported total revenue of €5.19 billion, a 6 percent drop in comparable revenue year over year from €5.00 billion in Q3 2022. COVID-19 antigen testing revenues fell to about €300 million in the recently completed quarter from around €600 million in Q3 2021, the firm said.
Company officials had predicted last quarter that COVID-19–related revenues would fall in the second half of 2022. Even excluding COVID-19 tests, though, Siemens Healthineers reported an 8 percent decline in comparable revenue from diagnostics, which company officials attributed to declines in routine diagnostic tests during pandemic-related lockdowns in China.
Siemens Healthineers still predicts its diagnostics business will generate mid-single-digit growth in comparable revenues during fiscal year 2022, which includes an assumption that rapid COVID-19 antigen tests will bring in €1.5 billion, up from a previous prediction of €1.3 billion.
Siemens has seen a rise in COVID-19 antigen tests in Japan, which is a reason why the company added €200 million to the company's revenue outlook.
The decline in revenues from COVID-19 antigen tests was particularly high in the Europe, Middle East, and Africa region, although the company boasted solid growth in other businesses in the region. The Americas region, however, had a strong revenues increase from rapid antigen tests and overall double-digit business growth, but revenues were only up slightly once COVID-19 tests were excluded, the company said. Revenues in the Asia and Australia region were flat year to year, despite the lockdown-related revenue decline in China.
Siemens Healthineers' net income was €364 million, or €.32 per share, in Q3 2022, compared to a net income of €395 million, or €.35 per share, a year ago. Adjusted EPS for Q3 2022 was €.43.
CEO Bernd Montag said on a call with investors that he was particularly proud of Siemens Healthineers' performance during the quarter. Excluding COVID-19 antigen testing revenue, the company grew revenue 1 percent despite tough conditions including China's pandemic-related lockdowns and rising procurement and logistics costs.
"With our financial performance in Q3, we have been able to demonstrate our strength in unprecedented times," Montag said.
Siemens Healthineers CFO Jochen Schmitz said during the call the company expects its strongest revenue numbers in Q4 through a combination of typical seasonal changes in income, a rebound in demand in China, normalization in the global supply chain, and a rise in rapid antigen revenue.
Siemens reaffirmed Wednesday a previous prediction of revenue growth between 5.5 percent and 7.5 percent for fiscal year 2022 and adjusted EPS of between €2.25 and €2.35.