Investing.co -- Siemens (ETR:SIEGn) reported stronger-than-expected results for its fiscal second quarter, supported by a rebound in automation demand from China and increased train orders across the U.S. and Europe.
The German engineering group posted a net profit of €2.25 billion for the three months ended March, up from €2.03 billion a year earlier. Revenue rose 6% to €19.8 billion, with net income climbing 11%, the company said on Thursday.
Both figures beat market expectations. Analysts surveyed by the company had forecast a net profit of €1.85 billion on revenue of €19.22 billion.
Industrial profit rose 29% to €3.24 billion ($3.63 billion) in the quarter ended March, surpassing analysts’ forecast of €2.75 billion.
The mobility division was a key driver of performance, with orders rising 22% to €3.9 billion, boosted by sales of electric locomotives in major Western markets.
Total (EPA:TTEF) orders came in at €21.64 billion, also ahead of the €20.07 billion expected.
Siemens kept its full-year outlook unchanged, targeting comparable revenue growth between 3% and 7%, despite expecting "increased uncertainty in the economic environment".
"Our customers continue to rely on our technology, and our global footprint demonstrates our resilience," said Siemens CEO Roland Busch in a statement.
The company announced cost-saving measures earlier this year, including 6,000 job cuts, and is continuing its shift toward software-centric offerings to enhance profitability.
Siemens said business conditions are improving across most segments, despite a 5% revenue decline in its core Digital Industries unit. It noted that customer destocking appears to be easing.
Growth in Smart Infrastructure helped offset the weakness, with sales up 12% and profit surging 61%, supported in part by a divestment. The Mobility division also posted higher revenue and profit, driven by global demand for rail infrastructure, including electric trains in the U.S.
RBC Capital Markets analysts said Siemens’ latest print brings "no big changes to the equity story - even if there are a few moving parts."
"We do note recent share price strength could create some short term downside risk. We downgraded to Sector Perform from Outperform in March reflecting a valuation that is now more in line with the peer group," they added.