Siemens Healthineers Lowers Revenue Forecast Amid Diagnostics Setback

Siemens Healthineers has adjusted its revenue growth forecast for 2026, citing difficulties within its diagnostics segment, particularly in China. The German medical technology company now anticipates revenue growth between 3.5% and 4%, down from a previous estimate of 5% to 6%. This revision is attributed to China's volume-based procurement policy and reduced reimbursement rates, which have adversely affected pricing and sales volumes in the diagnostics market.

Impact of China's Procurement Policies

The procurement strategy in China, which emphasizes volume and cost-effectiveness, has put pressure on Siemens Healthineers' diagnostics business. This approach has led to a 5.5% decline in diagnostics revenue during the company's fiscal third quarter. Chief Financial Officer Jochen Schmitz indicated that a similar decline is expected in the fourth quarter, reflecting ongoing challenges in this key market.

Financial Performance and Adjusted Earnings

Despite the setback in diagnostics, Siemens Healthineers reported a 1.8% increase in overall revenue to €5.76 billion ($6.63 billion) for the third quarter, slightly below consensus estimates. The company also raised its forecast for adjusted earnings per share to between €2.35 and €2.45, up from an earlier range of €2.20 to €2.40. This adjustment accounts for anticipated U.S. tariff refunds following a Supreme Court decision that overturned certain levies. However, Schmitz noted that the company still needs to apply for additional refunds, which are unlikely to be received before 2027.

Market Reaction and Operating Profit Margin

The initial market response to Siemens Healthineers' announcement was a more than 3% drop in share prices, though they later recovered to trade 1.4% higher. The company's adjusted operating profit margin improved to 19.1% in the third quarter, compared to 16.8% in the previous year, indicating stronger operational efficiency despite the revenue challenges.