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Siemens Raises Guidance After Faster Than Expected Rebound
Sales in China rose by 21% in the three months to Dec. 31, the first quarter of Siemens' financial year, driven by increased demand for factory automation.
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Engineering group Siemens raised its 2021 guidance on Wednesday after beating first-quarter expectations, citing a quicker than forecast post-pandemic rebound in the automotive and machine-building sectors.
The German trains-to-industrial software group, a bellwether for the health of the broader industrial sector, noted strong improvements in China and Germany as customers that had remained on the sidelines during the COVID-19 pandemic ramped up production.
Sales in China rose by 21% in the three months to Dec. 31, the first quarter of Siemens' financial year, driven by increased demand for factory automation. Among projects cited by Siemens was its help in boosting the BMW Brilliance joint venture's car production capacity.
German sales were up 8% as the country's export sector recovered, though U.S. sales and orders declined because of continued sluggish spending in the oil and gas sector.
After beating first-quarter forecasts for sales, orders and profit in the last results under longstanding CEO Joe Kaeser, Siemens now expects revenue growth in the mid to high single-digit percentage range in the 12 months to Sept 30. Its previous guidance, issued in November, was for moderate growth of 3-5%.
The company's shares reacted positively and were up 1.8% at 0856 GMT.
"We're getting through the pandemic well and have achieved an excellent performance at the same time," Deputy Chief Executive Roland Busch told reporters.
He said the improvement was not a "flash in the pan" reflecting customers merely restocking after running down inventories last year, but was the start of a long-term improvement.
For its first quarter, the Munich-based company posted adjusted industrial profit up 39% at 2.13 billion euros ($2.56 billion), beating a consensus forecast of 1.67 billion euros in a company poll of analysts.
Orders rose 11% to 15.94 billion euros, against forecasts of 13.90 billion euros, while a jump in revenue to 14.07 billion euros beat analyst expectations of 12.73 billion euros expected.
Busch, who will replace Kaeser after the annual shareholder meeting on Wednesday, said Siemens also benefited from a 64% fall in travel costs during the pandemic.
"While these results benefited from some temporary factors ... it still confirms to us the investment case of Siemens' strong offering in attractive markets," said JP Morgan analyst Andreas Willi.