Siemens raises profit forecast as new orders roll in

AP News
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Posted: Aug 04, 2016 4:12 AM

FRANKFURT, Germany (AP) — German industrial equipment maker Siemens AG raised its profit forecast for the year Thursday as new orders jumped and quarterly profits beat expectations.

The company said earnings per share for the current business year would rise to 6.50-6.70 euros, up from the previous forecast for 6.00-6.40 euros.

The company, which makes trains, wind and gas power generation equipment and medical imaging devices, said new orders — a key indicator of future profit — grew 6 percent to 21.1 billion euros ($23.6 billion).

Siemens shares rose 2.9 percent to 99.63 euros in morning trading in Europe.

CEO Joe Kaeser said the company is making progress in streamlining its multiple businesses and increasing its profit margin, which rose to 10.5 percent from 9.8 percent in the same quarter a year earlier.

"We have delivered on what we promised," he said during a conference call with journalists.

Kaeser said the company was coping with uncertainty from the British vote to leave the European Union and a failed coup in Turkey. It is also dealing with low prices for energy, which affect its customers in the oil industry.

Net income fell slightly to 1.37 billion euros in the April-June quarter, the company's fiscal third quarter, from 1.38 billion euros in the same period a year earlier due to financial factors including tax benefits for business the company has discontinued and interest expenses from increased debt issuance. That profit figure beat analyst estimates for 1.16 billion euros as compiled by financial information provider FactSet.

The Munich-based company's own profit measure, dubbed profit from industrial business, rose 20 percent to 2.2 billion euros. The measure excludes various financial items including some interest and pension costs.