Defying pandemic, Siemens beats profit forecast

FRANKFURT AM MAIN: German industrial conglomerate Siemens on Thursday reported a better-than-expected third-quarter profit, as the company proved broadly resilient to the impact of the coronavirus pandemic.

Net profit for the three months to June reached 539 million euros ($639 million), around half of the 1.1 billion euros in the same period of the previous year, but soundly beating expectations of 273 million euros predicted by analysts surveyed by FactSet.

Revenue came in at 13.5 billion euros, 5 percent lower than the same quarter a year ago, according to the group.

Looking ahead, the conglomerate acknowledged that the economic impact of the pandemic will make itself felt in its fourth quarter results, but said it continued to "expect a moderate decline in comparable revenue in fiscal year 2020".

"Despite the severe global crisis, we delivered strong operating performance and rigorously drove our realignment forward," Siemens chief executive Joe Kaeser said.

The Munich-based company said earnings at its digital industries segment were boosted by a strong performance in its software business and a positive 211 million euro effect from the revaluation of the stake in US software development firm Bentley Systems. This "more than offset declines at other industrial businesses," Siemens said.

The DAX member said "major supply constraints (were) successfully avoided" in the period.

However, Siemens took a heavy charge of 451 million euros on its discontinued operations, due to losses at its Siemens Gamesa renewable-energy subsidiary, including project delays and cost increases, the company said.

Orders rose in its mobility unit, notably from a 1.1 billion euro order for high-speed trains in Germany.

Siemens said it will push on with its plan to spinoff Siemens Energy, its conventional energy division which includes oil-and-gas operations, power division and gas turbines.

The conglomerate is slimming down via successive spinoffs and flotations of units, which so far includes Gamesa and medical company Healthineers.

Shares at 0720 GMT were up 4.3 percent, leading Germany's benchmark DAX index, which stood 0.5 percent higher.