⌛ Did you miss ProPicks’ 13% gains in May? Subscribe now & catch June’s top AI-picked stocks early.Unlock Stocks

Siemens upbeat about coming year

Published 11/17/2022, 05:14 PM
© Reuters
DE40
-
STOXX50
-
SIEGn
-
SIEGY
-

By Geoffrey Smith

Investing.com -- Siemens (ETR:SIEGn) (OTC:SIEGY) stock leaped to an eight-month high on Thursday after the German engineering giant defied the gloom around Europe's largest economy with a dividend increase and a strikingly upbeat outlook for the next 12 months.

Siemens said it expects earnings per share to more than double in the year ending September 2023 to a range around 8.95 euros a share, seeing strong growth in all of its main industrial businesses. That confidence underpinned a 6% increase in its annual dividend to €4.25 a share from €4.00.

Conspicuously, it forecast that orders would continue to outpace revenue over the last 12 months, a forecast that contrast markedly with the sharp decline in orders to German manufacturers over recent months. It said its forecast was based on the assumption that problems with global supply chains continue to ease, and that there are no further escalations in geopolitical tensions.

"Under these conditions, with our high order backlog, particularly in short-cycle businesses, we expect our industrial businesses to continue their profitable growth," the company said.

Siemens had ended its fiscal 2022 year on a strong note, with fourth quarter revenue rising 18% to €20.6 billion and orders rising 14% to €21.8B, giving a book-to-bill ratio of 1.06. Profit at its industrial businesses had climbed 38% to €3.2B.

Disposals helped the group to a net profit of €2.9B and a free cash flow of €3.5B.

The figures were a marked improvement from the previous three months, which had been overshadowed by a big write-down on its stake in the energy business that it spun off two years ago and now accounts for as a portfolio company.

"Strong demand continues for our hardware and software offerings, including higher than expected growth for our digital business revenue," said chief financial officer Ralf Thomas.

The numbers were also supported by tailwinds from the currency market, where the euro's weakness added 8 percentage points each to order and revenue growth, factors that may be harder to repeat in coming quarters as the dollar's rally shows signs of topping out.

By 03:45 ET (08:45 GMT), Siemens stock was up 8.1% in Frankfurt, comfortably the best performer in the benchmark DAX and Stoxx 50 indices.

Siemens is now up over 30% since late September. It has led a rally in local stocks amid growing confidence that Germany will avoid large-scale industrial disruptions from energy shortages this winter, having entered the peak heating season with its gas storage facilities almost completely full. Growing belief in an early end to interest rate rises in the U.S. and Eurozone has also helped fuel that rally.

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.