Siemens Shares Jump After Better-Than-Expected 1Q
--Siemens's ahead-of-consensus performance in the first quarter
of 2021 was driven by its digital-industries business, the company
--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
At 1011 GMT, shares in Siemens traded 4.6% higher at
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
Write to Joshua Stein at firstname.lastname@example.org
(END) Dow Jones Newswires
January 22, 2021 05:27 ET (10:27 GMT)
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