Home » Siemens closes in on all-time high after guidance upgrade

Siemens closes in on all-time high after guidance upgrade

by WorldFinance
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Siemens closes in on all-time high after guidance upgrade
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By Geoffrey Smith

Investing.com — Siemens (ETR:) 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 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 , 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. 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 and the .

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.

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