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Singapore Technologies Engineering Ltd’s Latest Quarter: 2 Slides that Explain its Electronics Segment’s Performance

Singapore Technologies Engineering Ltd (SGX: S63) is a large engineering conglomerate with four main business segments, namely, Aerospace, Electronics, Land Systems, and Marine.

Earlier this month, the company released its 2017 third quarter earnings. Given the vast scale of its business, it may be useful for investors take a separate look at each of the four segments within the company.

In today’s article, we will do a quick review of ST Engineering’s Electronics business performance, summarised in the two slides below.

Segment sales and profits

Source: ST Engineering’s earnings presentation

For context, ST Engineering posted $1.6 billion in total revenue in its latest quarter. The Electroncis division is a major contributor with $608 million in sales. The Electronics division can be further broken down to LSG (Large-scale System Group), SSG (Software Systems Group) and CSG (Communication & Sensor Systems Group).

From the above, we can see that with both SSG and CSG posted growth in revenue and profit before tax (PBT) for the latest quarter,  compared to the same period a year ago. LSG was the laggard with lower sales and PBT.

SSG benefited from higher project revenue recognition, while CSG had higher sales of satellite communication products. Elsewhere, LSG reported a sales decline due to  lower project revenue recognition.

Sales by region

Source: ST Engineering’s earnings presentation

The slide above provides is a quick summary of ST Engineering’s Electronics business sales organized by region.

From this view, we can see most regions posted higher sales. Asia is by far the largest contributor of sales, with 77% of sales or $385 million. USA is the second largest with $62 million.

Overall, the Electronics segment delivered a positive performance in third-quarter of 2017, posting both higher sales and profit compared to same period last year.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.