By Sara Germano
BERLIN--Siemens AG on Thursday reported higher sales and profit in the latest quarter and offered a cautiously optimistic outlook for the year ahead as it continues to realign its business to accommodate a surge in demand for renewable energy.
Siemens, like its longtime U.S. rival General Electric, has been contending with a global shift away from fossil fuels. This, combined with the global economic downturn, has forced management to streamline the industrial conglomerate.
In May, the company announced the planned spinoff of its gas and power unit, which will be named Siemens Energy and includes its large turbine and renewable energy businesses, by September of next year.
The company said the gas and power unit saw an uptick in large orders, boosted by a forthcoming 450 million euro ($498 million) combined power plant in France. Michael Sen, who will lead the spinoff, said the new company would have an estimated EUR30 billion business volume and a roughly EUR70 billion order backlog.
Siemens Chief Executive Joe Kaeser said the forthcoming U.S. election and continued downturn of the global economy made forecasting the year ahead difficult but that "we are going to continue on our growth path."
Shares rose more than 4% to EUR113.36 in early trading Thursday after its fourth-quarter net profit and revenue beat expectations.
Siemens, whose businesses span trains, turbines, and automation technologies, is predicting moderate sales and revenue growth in 2020. The company forecast earnings per share from net income of between EUR6.30 and EUR7.00, compared with EUR6.41 in fiscal 2019.
Siemens's core industrial business showed signs of some improvement. Its full-year industrial profit margin, a benchmark figure closely watched by the markets, rose to 11.3% from 10.1% in 2018.
Net income for its fourth quarter more than doubled to EUR1.5 billion, boosted by a substantially lower income tax rate versus the same period a year ago, the company said.
Revenue for the quarter rose 8% to EUR24.5 billion, while orders grew 4% to EUR24.7 billion, driven by Siemens Healthineers, the separately listed medical technology business.
Geographically, a surge in orders in the Americas offset flat growth in China and a steep decline in Siemens's home market of Germany, whose manufacturing sector has been in a deep recession since last year.
-Kim Richters contributed to this article.
Write to Sara Germano at email@example.com
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