Siemens improves the outlook after the next-quarter deals defeat the predictions

May 18, 2023: On Wednesday, Siemens introduced its deals and profit guidance after the German engineering and technology group beat deals predictions during its second quarter.

The maker of products which ranges from trains and industrial software now expects a comparable revenue increase of 9% to 11% in 1 year by September, up from its last outlook for a surge of 7% to 10%.

Siemens also anticipates increasing its underlying basic earnings per share from 9.60 euros to 9.90 euros, starting from the 8.90 euros to 9.40 euros scheduled in February.

With a profit from the partial reversal of the last charge, the overall EPS is expected to surge to 11.61-11.91 euros.

The company had already raised its complete-year outlook in February, citing strong demand and its huge order backlog, which surged to 105 billion euros in the next quarter.

The raised guidance came after Siemens reported its second-quarter earnings increased by 14% to 19.42 billion euros ($21.38 billion). Analysts in a company-compiled poll had anticipated 18.59 billion euros.

In the months to the end of March, industrial profit increased 47% to 2.61 billion euros, cutting forecasts for 2.70 billion euros.

“Siemens continues its outstanding performance, delivering several records, including impressive margin increases and all-time highs in profit for Digital Industries and Smart Infrastructure, as well as another record in order backlog,” said Chief Executive Roland Busch.

The results of Siemens, whose sensors, controllers and software are used in factories, transport systems and buildings, are experienced as indicators for the health of the broader industrial economy.

The group’s industrial profit includes gains made by its digital industries, innovative infrastructure, mobility and healthcare businesses, which way the core of its operations.

The outcome underlines the recent upward trend in the global industry as it overcomes supply chain bottlenecks that have plagued it until last year.

Swiss peer ABB recently increased its complete-year guidance for sales and gains on the back of a solid first quarter, while French train maker Alstom in the previous week said demand momentum remained very positive.

Siemens’s net income tripled to 3.55 billion, helped by the company booking a non-cash gain of 1.59 billion euros from reversing an impairment charge related to its investment in Siemens Energy.