Siemens’ underlying profit jumps as order book swells
Boosted by a 3.1 billion euros order for power plants in Egypt.
FRANKFURT — Siemens AG, maker of heavy industrial equipment including power stations and trains, saw net profit fall in the most recent quarter due to large one-time gains in the year earlier period.
But the company’s earnings beat analyst estimates and it reported a strong rise in new orders.
Net profit fell to 1.5 billion euros ($1.7 billion) in the January-March quarter from 3.9 billion euros in the same quarter last year. In the year-ago quarter the company booked 3 billion euros in gains from selling its hearing-aid business and a stake in a home appliances company.
Net profit beat analyst estimates for 1.1 billion euros as compiled by financial information provider FactSet.
With one-time effects from a year earlier tossed out, underlying industrial profit grew 28%, to 2.1 billion euros ($2.4 billion).
Munich-based Siemens said orders grew 7% to 22.3 billion euros, boosted by a 3.1 billion euros order for power plants in Egypt. Orders are crucial for future earnings, since the company’s business is focused on long-term infrastructure and transport projects that will add to profits in the quarters and years ahead.
The company, which does business all over the world, gave a cautious outlook for the year ahead, saying it would meet its earnings targets but warning that it expected “further softening” in the global economy. It predicted “moderate revenue growth.”
Revenue grew 5% to 19 billion euros.
“We delivered another convincing performance in the second quarter, compared to both the prior year and our industry sector,” CEO Joe Kaeser said in a statement. “Despite ongoing challenges in the market environment, we will continue to focus rigorously on profitable growth.”