Siemens raises full year outlook after 2nd quarter sales beat

1 week ago 59
  • Expanding order book makes Siemens optimistic for future
  • Siemens CEO: supply chain constraints eased further
  • CEO: 'very confident' about 2nd half-year
  • Shares indicated higher in pre-market

ZURICH, May 17 (Reuters) - Siemens (SIEGn.DE) raised its full year sales and profit guidance on Wednesday after the German engineering and technology group beat sales forecasts during its second quarter.

The maker of products ranging from trains and industrial software was in confident mood, boosted by its enormous order book which continued to expand, and a further easing supply chain bottlenecks.

Continued strong demand also helped its factory automation and smart buildings divisions to their highest ever quarterly profit, while the mobility business, which encompasses trains, rolling stock and transport systems, returned to profit after last year's hit from the group's withdrawal from Russia.

"We had a very successful first half-year," Chief Executive Roland Busch told reporters.

"We now want to further leverage our exceptional order backlog and execution strength. This means that – despite a volatile environment – we’re very confident about the second half-year."

The company now expects comparable revenue growth of 9% to 11% in the 12 months to the end of September, up from its previous outlook for an increase of 7% to 10%.

Siemens also expects to increase its underlying basic earnings per share to a range of 9.60 euros to 9.90 euros, up from the 8.90 euros to 9.40 euros it forecast in February.

The company had already raised its full-year outlook in February, citing strong demand and its massive order backlog, which increased to 105 billion euros ($115.58 billion) in the second quarter.

The raised guidance came after Siemens reported its second quarter revenue jumped by 14% to 19.42 billion euros ($21.38 billion). Analysts in a company-compiled poll had expected 18.59 billion euros.

Industrial profit in the three months to the end of March rose 47% to 2.61 billion euros, missing forecasts for 2.70 billion euros.


The results of Siemens, whose sensors, controllers and software are used in factories, transport systems and buildings, are seen as indicators for the health of the broader industrial economy.

The group's industrial profit includes gains made by its digital industries, smart infrastructure, mobility and health care businesses, which form the core of its operations.

The results underline the recent upward trend in global industry as it overcomes supply chain bottlenecks that have plagued it until last year.

Swiss peer ABB (ABBN.S) recently raised its full-year guidance for sales and profit on the back of a strong first quarter, while French train maker Alstom (ALSO.PA) last week said market momentum remained very positive.

Siemens's net income almost tripled to 3.55 billion, helped by the company booking a non cash gain of 1.59 billion euros from reversing an impairment charge related to its investment in Siemens Energy.

Siemens shares, which closed at 149.6 euros on Tuesday, were indicated 1.6% higher in premarket activity.

"Solid reporting could push shares above 152.2 euros to a 1.5-years high. Even though a strong Q223 was already expected as peers reported good results," said a Frankfurt-based trader.

($1 = 0.9084 euros)

Reporting by John Revill, editing by Rachel More

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