Siemens Raises Profit Forecast Again As Industrial Demand Rises
- Third quarter adjusted operating income up 29%
- Annual net income outlook raised to 6.1 billion – 6.4 billion euros
- Sees upturn in automotive, machine building, electronics
ZURICH, Aug. 5 (Reuters) – German engineering and technology firm Siemens (SIEGn.DE) on Thursday raised its profit forecast for the third time this year due to increased post-pandemic demand.
The software maker trains the industry to see a widespread increase in demand as customers around the world replenish their stocks and vaccination campaigns have accelerated the economic recovery.
The Munich-based company said orders jumped 47%, driven by a strong recovery in areas such as autos, machine building and electronics, while aerospace and defense sectors previously severely affected showed signs of improvement.
Siemens has raised its profit forecast again after beating forecasts for sales, profits and orders.
“In the third quarter, we delivered once again – with strong, profitable growth across all businesses,” said chief executive Roland Busch, who replaced longtime CEO Joe Kaeser in February.
The company continued to add targeted acquisitions, particularly in software and digital, Busch said.
Siemens on Thursday announced a € 550 million deal to purchase railway software company Sqills, as part of the company’s strategy to expand into high-growth markets alongside its core businesses. Read more
In the three months to the end of June, Siemens said adjusted operating profit for its industrial business rose 29% to 2.32 billion euros ($ 2.75 billion), beating the 2, 09 billion euros from a consensus forecast of analysts gathered by the company.
Revenue increased 24% to 16.09 billion euros, while orders jumped 47% to 20.49 billion euros, beating forecasts.
It now expects its annual revenue to grow 11% to 12%, up from its previous forecast for an increase of 9% to 11%, boosted by higher sales from its business operations. factory and smart infrastructure automation.
Replenishment of customers worried about shortages has played a role in the recovery, although the main driver has been the economic recovery, CFO Ralf Thomas told reporters.
“If you had 100% growth momentum, you can probably attribute anything between 7% to 10% of that to extraordinary behavior,” Thomas said. “It’s my hunch.”
The net result for the year at the end of September is now expected to be between 6.1 and 6.4 billion euros. The company had previously moved towards a range of 5.7 to 6.2 billion euros.
Siemens shares, which have lagged behind the performance of rivals like France’s Schneider Electric (SCHN.PA) and Swiss ABB (ABBN.S) in recent weeks, rose 3.7% at the start of trading on the German DAX index.
Schnieider and ABB also recently raised their outlook. Read more
“We see potential for catching up in the medium term given the strong revenue momentum that goes beyond ‘growth on easy lineups’ with Q3 2021 revenue 9% higher than before. pandemic, ”JP Morgan analyst Andreas Willi said of Siemens.
($ 1 = 0.8450 euros)
Reporting by John Revill. Editing by Jane Merriman
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