🔥 Premium AI-powered Stock Picks from InvestingPro Now up to 50% OffCLAIM SALE

Siemens closes in on all-time high after guidance upgrade

Published 02/09/2023, 09:34 PM
© Reuters.

By Geoffrey Smith

Investing.com -- Siemens (ETR:SIEGn) stock soared on Thursday, closing in on an all-time high after a strong start to its fiscal year highlighted the benefits of a profound corporate restructuring over the last decade.

The German engineering giant raised its forecasts for profit and revenue for the year ending in September after posting and 8.1% rise in revenue in the three months through December to €18.1 billion (€1 = $1.0769).

Siemens now expects earnings per share to rise to a range around €9.15, up 2.2% from its previous guidance around a midpoint of €8.95. It also nudged up its guidance for revenue growth by 1 percentage point to 7%-10%.

“With full order books and a temporary and deliberate build-up of critical inventories, we are well prepared for further profitable growth in the upcoming quarters,” chief financial officer Ralf Thomas said in a statement.

The move reflected a strong start and improved outlook for its Digital Industries unit, one of the core divisions that it is focusing on having spun off its energy, lighting, and other businesses in recent years.

Digital Industries’ revenue is now set to grow by between 12% and 15%, up from 10%-13%, while its operating margin is now seen at around 21%, up from 20.5%. The outlook for the Smart Infrastructure division has also been revised slightly higher, but that for Mobility has remained unchanged.

The new guidance comes against a backdrop of weakness in German manufacturing, which has seen orders drop sharply since Russia’s invasion of Ukraine a year ago. Many of Germany’s factories only made it through last year by working off large amounts of business that was unfinished due to supply chain disruptions during the pandemic. Orders fell sharply in Germany at the end of 2022, but Siemens said it still expects to receive more orders than it fulfills this year.

Net profit in the first quarter of fiscal 2023 fell to €1.6B from €1.8B, as the company was forced to absorb higher energy costs.

By 08:15 ET (13:15 GMT), Siemens stock was up 7.3%, making it the best-performing stock in the DAX and the Euro Stoxx 50.

At its current level, it's only 4% below the all-time high it set in late 2021, having risen 50% since September, when Germany's looming energy crisis started to ease.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.