Siemens quarterly profit beats market view on electrification, software

By Ludwig Burger

FRANKFURT (Reuters) -German industrial gear maker Siemens posted better-than-expected earnings growth during the April-to-June quarter, buoyed by customers who are upgrading their electricity infrastructure and by demand for production software.

For its fiscal third quarter, Siemens on Thursday reported an 11% increase in operating profit before certain items to 3.0 billion euros ($3.3 billion), beating the average analyst forecast of 2.84 billion euros in a consensus posted on the group’s website.

The maker of trains and factory automation systems confirmed its guidance for its fiscal year until end-September, saying exceptionally high orders for industrial software was tempered by a challenging environment for its industrial automation business.

Revenue growth is still seen at the lower end of a range between 4% to 8%, when adjusted for currency swings, acquisitions and divestments, it said.

Profit margins at the Digital Industries unit, a maker of software and gear for process automation, would be at the lower end of the previous target range, while margins would be at the upper end at the Smart Infrastructure unit, which makes systems for ventilation, wiring and security at large facilities.

Orders in the quarter declined 15% but were better than expected at 19.8 billion euros, after the year-earlier figure was boosted by a record cluster of train orders.

Siemens said late on Wednesday that it aims to speed up the transition to a technology-focused enterprise by expanding its management board to seven members from five.

($1 = 0.9146 euros)