Siemens AG raised its outlook for a second time this fiscal year after revenue and orders jumped, with the company’s main businesses pairing industrial products with digital solutions driving the result.
The German company now sees comparable revenue growth of 9 to 11 percent for the year, up from 7 to 10 percent, driving a rise in expected earnings per share, Siemens said yesterday.
After a surge in demand during the fiscal second quarter, Siemens said that orders are set to normalize during the second half of this year.
Photo: AP
The company said that its order backlog rose again during the quarter to an all-time high of 105 billion euros (US$113.8 billion), following a record intake in the mobility segment, which makes trains.
“We are sitting on a record high order backlog, which gives us very good visibility on fiscal 2023 and into 2024,” Siemens CEO Roland Busch said in an interview with Bloomberg Television. “We see a normalization of order intake, which is good as we want to go back to better delivery times.”
For the second half of the fiscal year, Siemens expects revenue of 30 billion euros from its order bank alone.
At Siemens’ main divisions, digital industries and smart infrastructure, the picture was more mixed. While profit surged, orders at the unit making factory products and related digital services fell 10 percent. The company still raised its profit margin outlook for digital industries to as much as 23.5 percent, up from as much as 22 percent.
At smart infrastructure, with products helping buildings reduce their carbon footprint, orders rose 9 percent, and Siemens also boosted expectations for revenue and returns.
“Think about the transformation we are in with regards to climate change,” Busch said. “We have to drive up efficiency and get our energy consumption down — we believe we are sitting on a supercycle with a perfect portfolio serving this wave.”
Siemens is reaping the results of a major strategic reset of its business, shedding heavy-duty equipment in favor of software-driven product lines with higher profitability levels.
During the fiscal second quarter, comparable revenue rose 15 percent to 19.4 billion euros, beating analyst estimates of 18.7 billion euros. Net income rose to 3.48 billion euros, above analyst estimates of 3.1 billion euros.
Siemens’ bottom line profited from a 1.59 billion euros accounting gain related to the partial impairment reversal on its stake in Siemens Energy.
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