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Siemens raises profit guidance again as orders surge

by Wanda Rich
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By John Revill

ZURICH (Reuters) -Siemens became the latest industrial firm to report a post-pandemic surge in demand, prompting the German engineering and technology company on Thursday to raise its profit guidance for the third time this year.

The trains-to-industrial software maker said it was seeing a broad-based increase in demand as customers around the world rebuilt their inventories and vaccination campaigns accelerated the economic recovery.

The Munich company said its orders surged by 47%, driven by double digit growth in factory automation and smart infrastructure.

As a result Siemens hiked its profit guidance for the third time in its 2021 business year, following previous increases in February and May.

It now expects full year sales and profit to be higher than previously thought after beating forecasts for sales, profit and orders during the third quarter.

“Siemens is consistently pursuing its goal of accelerated high-value growth. In the third quarter, once again we delivered – with strong and profitable growth in all businesses,” Chief Executive Roland Busch said in a statement.

Shares in Siemens were indicated up 1.6% in Lang & Schwarz premarket trade.

Higher raw materials prices and supply chain bottlenecks – for example in semi conductor chips – remained a problem, but were being overcome, he said.

Adjusted operating profit at Siemens’ industrial business rose 29% to 2.32 billion euros ($2.75 billion) in the three months to the end of June, beating the 2.09 billion euros in a company-gathered consensus of analyst forecasts.

Revenue rose 24% to 16.09 billion euros, beating forecasts for 15.11 billion euros, while orders surged 47% to 20.49 billion euros, ahead of forecasts for 16.32 billion.

Shareholders’ net income of 1.35 billion euros for the quarter beat forecasts for 948 million euros.

The company said it now expects its full year revenue to rise by 11% to 12%, up from its previous view for an increase of 9% to 11%, boosted by higher sales of its factory automation and smart infrastructure businesses.

Net income for the year to the end of September is now expected to be in the range of 6.1 billion to 6.4 billion euros. The company had previously guided to a range of 5.7 billion to 6.2 billion euros.

Other industrial companies have recently upped their guidance based on the faster than anticipated post-pandemic recovery in many sectors and stronger demand in China and the United States as their economies rebound.

French rival Schneider Electric last month raised its profit and revenue expectations for 2021, while Switzerland’s ABB doubled its revenue expectations and flagged a stronger improvement in profitability.

($1 = 0.8450 euros)

(Reporting by John Revill)