Siemens raises guidance after posting highest-ever industrial profit
Record Results and Upgraded Outlook
By John Revill
ZURICH, Aug 6 (Reuters) - Siemens reported its highest-ever quarterly industrial profit and new orders on Thursday, beating analyst forecasts and prompting the German industrial group to raise full-year profit guidance.
The company, whose products span trains to factory software and building control systems, saw improvements across most industrial businesses, led by a sharp improvement at its Digital Industries factory automation unit.
Quarterly Financial Performance
Siemens reported industrial profit rising 25% to €3.52 billion ($4.09 billion) for the three months ended June 30, its highest quarterly figure ever.
The figure, up from €2.82 billion a year earlier, beat forecasts of €3.18 billion in a company-gathered consensus of analyst estimates.
Revenues rose 7% to €20.79 billion, ahead of forecasts for €20.64 billion, while orders picked up 13% to €27.90 billion - another highest-ever quarterly figure.
Full-Year Profit Guidance Raised
As a result, Siemens raised its full-year profit outlook for the year to the end of September. It now expects earnings per share of €11.20 to €11.50, versus previous guidance for €10.70 to €11.10.
"We delivered another very successful quarter with record orders and profit," Chief Executive Roland Busch said in a statement.
Growth Drivers and Business Focus
The company's focus on industrial AI, with its products enabling customers to speed up their innovation and increase their productivity, was driving growth he added.
Digital Industries Unit Performance
During the quarter, Siemens' Digital Industries business, which makes factory controllers and software, boosted profit by 44%, benefiting from job cuts aimed at restoring competitiveness as well as strong demand in China and the United States.
Role of Software and Artificial Intelligence
Siemens' Digital Industries software helps manufacturers design products, simulate and run factories, and connect equipment with production data, using artificial intelligence to automate tasks, identify potential faults and improve product designs and manufacturing.
Siemens Healthineers Spin-Off
The company said it had agreed with German tax authorities on how to treat Siemens Healthineers shares it will give its investors following the planned spin-off.
Tax Agreement and Shareholder Impact
The agreement means the distribution will be tax-free for Siemens shareholders.
Siemens, which held 67% in the medical equipment maker when the plan was announced, aims to spin off roughly 30% if it gets shareholder approval next year.
CFO Statement on Spin-Off Progress
"We've now received binding decisions from the tax authorities clarifying the relevant tax topics," said CFO Veronika Bienert. "As a result, we can proceed with the spin-off of Siemens Healthineers as planned."
($1=0.8660 euros)
(Reporting by John RevillEditing by Linda Pasquini and Miranda Murray)