Published by Jessica Weisman-Pitts
Posted on November 14, 2024
By John Revill
ZURICH (Reuters) -Siemens stock surged on Thursday after the engineering company posted better than expected results and said it was in a good position to navigate mounting global political and trade tensions.
The trains to industrial software maker’s shares rose more than 8% in early trading, making Siemens the top performer on the Stoxx Europe 600 Industrial Goods and Services index.
Siemens said it expects its revenue to grow 3-7% over the next 12 months, down only slightly from its 4-8% target for 2024, despite flagging rising risks following the election of Donald Trump as U.S. president as well as political chaos in Germany.
Siemens also highlighted weak consumer demand, a drag in particular on its flagship factory automation business where it now plans to cut jobs.
“During the year, the world experienced ongoing geopolitical and macroeconomic uncertainties,” Chief Executive Roland Busch told reporters.
“And following the elections in the U.S. and considering the political situation in Germany, times won’t be getting easier.”
Still, Busch said Siemens was well prepared with a strong local manufacturing footprint in the United States, Germany and China, its three biggest markets.
The company was developing more local products and also sourcing more components from local suppliers, Busch said.
“The volume travelling between the regions is extremely low and we are working on it,” he added.
While its factory automation business was struggling, smart infrastructure and transport remained strong, Siemens said. The company also had an order backlog of 113 billion euros ($119 billion), its largest ever.
Busch said Siemens would not stand still, unveiling a new programme to speed up product development by using artificial intelligence.
In its results on Thursday, Siemens reported industrial profit falling 7% to 3.12 billion euros for the three months to the end of September, ahead of analysts’ consensus forecast of 3.0 billion euros.
The company, seen as a bellwether for the broader economy, reported revenue rising to 20.81 billion euros, slightly better than the forecast of 20.77 billion euros.
Analysts cheered the performance and a proposed dividend hike to 5.20 euros from 4.70 euros.
“We expect the shares to do well today on the back of a strong Q4, a solid outlook and a much better than expected divi proposal,” said Simon Toennessen at Jefferies.
($1 = 0.9486 euros)
(Reporting by John Revill. Editing by Mark Potter)
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