Siemens Raises Forecasts as 3Q Profit, Revenue Beat Expectations -- Update
August 05 2021 - 5:21AM
Dow Jones News
By Ed Frankl
Siemens AG shares gained on Thursday after the company reported
a rise in third-quarter profit, revenue that beat expectations and
raised its full-year outlook on the back of the global economic
recovery.
Shares at 0835 GMT rose 3.8% to EUR143.04.
The German engineering conglomerate said net profit attributable
to shareholders rose to 1.35 billion euros ($1.60 billion) for the
period ended June 30 from EUR539 million a year earlier.
Revenue for the quarter increased to EUR16.10 billion, compared
with EUR12.98 billion for the year-earlier period, on double-digit
growth in its digital-industries and smart-infrastructure units as
well as in its Healthineers subsidiary--helped by high-selling
Covid-19 tests.
The Munich-based company raised its guidance for fiscal year
2021 for net income to between EUR6.1 billion and EUR6.4 billion,
which includes Healthineers' recent acquisition of oncology
specialist Varian, from previous guidance of between EUR5.7 billion
and EUR6.2 billion.
It also ticked up its comparable-revenue expectations to growth
of 11%-12% from 9% to 11% previously.
After a third upgrade to guidance this financial year, "this
kind of consistency is very welcome and should be supportive of the
continued rerating of what we still believe is a meaningfully
mispriced share," German brokerage Berenberg said.
Orders jumped to EUR20.49 billion from EUR13.91 billion,
reflecting the recovery of the company's key automotive,
machine-building, electronics and infrastructure industries,
Siemens said.
Revenue and orders were well ahead of expectations of EUR15.11
billion and EUR16.32 billion respectively, according to analysts'
consensus provided by the company.
At Siemens's core industrial business, adjusted earnings before
interest, taxes and amortization increased 29% to EUR2.32 billion,
while the adjusted Ebita margin for the division rose to 15.3%.
Analysts had expected EUR2.10 billion for the segment's adjusted
Ebita.
The company said China was once again a key growth engine,
closely followed by Europe and the U.S., thanks to the progress in
vaccinations. Siemens said it anticipated the favorable
macroeconomic environment of the third quarter to continue.
Continuing supply-chain risks associated with electronics
components and higher raw-material prices were partially mitigated
through long-term contracts and additional hedging measures, the
company said.
Its factories are operating at full capacity in certain areas,
leading to extended customer delivery times and considerably higher
order backlogs, Chief Executive Roland Busch said in a telephone
press conference.
The company is making "very selective investments in new
applications, sales channels, and qualified people to grasp
emerging growth opportunities," he added.
However, the company continues to see rising costs of raw
materials, components and freight services for the rest of the
year, a situation that is likely to continue into fiscal 2022, Mr.
Busch said.
Write to Ed Frankl at edward.frankl@dowjones.com
(END) Dow Jones Newswires
August 05, 2021 05:11 ET (09:11 GMT)
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