--Siemens's ahead-of-consensus performance in the first quarter of 2021 was driven by its digital-industries business, the company said

--The German engineering company's China base and software business also recorded better-than-expected growth

--Analysts at UBS expect long-term growth to continue at Siemens's four core businesses

 

By Joshua Stein

 

Shares in Siemens AG gained on Friday after the German engineering conglomerate released preliminary results for the first quarter of its fiscal 2021, which it said were ahead of market expectations.

At 1011 GMT, shares in Siemens traded 4.6% higher at EUR129.46.

The company said late on Thursday that its performance in the first quarter, ended Dec. 31, was driven by the digital-industries business, which saw flat quarterly revenues of 3.77 billion euros ($4.59 billion). The consensus sales forecast was EUR3.56 billion, according to estimates provided by the company.

The digital-industries business recorded an adjusted earnings before interest, taxes and amortization of EUR848 million, which was above consensus of EUR592 million.

Siemens's digital-industries business worked at high capacity in the quarter, driven by the recovery in demand in the high-margin, short-cycle automation and software businesses. This pushed Ebita above consensus, the company said.

It also highlighted the better-than-expected growth in China during the period as a reason for its good performance.

The adjusted Ebita margin beat in the digital-industries business was "impressive," analysts at Jefferies said. Siemens posted a margin of 22.5%, compared with consensus expectations of 16.6% for the period.

Siemens will now review its fiscal 2021 outlook on the back of the strong performance, the company said.

Jefferies said the 40% growth rate in Siemens's industrial Ebita makes an outlook upgrade on Feb. 3, when Siemens releases its full earnings results for the first quarter, "highly likely."

Analysts at UBS said the company's transformation will continue into the fiscal year, with its new focus on four business segments promising long-term growth trends.

The Swiss bank highlighted moves such as the sale of Flender and the acquisition of Varian Medical, which should be completed in the first half of 2021, as the next chapters in Siemens's transformation.

 

Write to Joshua Stein at joshua.stein@wsj.com

 

(END) Dow Jones Newswires

January 22, 2021 05:27 ET (10:27 GMT)

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