MÜNICH (dpa-AFX) - After a strong start to the new fiscal year, technology giant Siemens has raised its earnings forecast for fiscal 2025/26. "Siemens is very well positioned in its growth markets. Artificial intelligence is a powerful growth driver for our businesses," said CEO Roland Busch on Thursday as he presented the first-quarter figures. These numbers were in some cases significantly better than expected. The Digital Industries division, in particular, continued its recovery compared to the weak prior-year quarter and delivered higher earnings contributions.
The DAX-listed share jumped to a new record high at the start of trading, gaining more than 6 percent to €273.30. The previous high was €266.25. Since the beginning of the year, the share price has risen by almost 14 percent. Siemens is currently in a neck-and-neck race with the recently weaker software group SAP for the crown of the most valuable company in the DAX.
An expert described it as a strong start to the fiscal year (ending in September) amid a healthy order book. The results were significantly better than expected, noted Mark Fielding of Canadian bank RBC. Analysts at Jefferies praised the better performance in Digital Industries as well as in the smart infrastructure business. Daniela Costa of Goldman Sachs expects the earnings consensus for the full year to rise by a low single-digit percentage.
The key earnings metric for Siemens – earnings per share before certain purchase price effects – is expected to rise to between €10.70 and €11.10 in 2025/26, the company announced Thursday in Munich. Previously, the Munich-based group had forecast €10.40 to €11. Revenue is still expected to grow by six to eight percent on a comparable basis. Currency and portfolio effects are excluded from this figure. Siemens anticipates continued headwinds from the strong euro.
In the first quarter, Siemens benefited from strong growth in its digital business, smart infrastructure, and rail division Mobility. On a comparable basis, order intake increased by ten percent to €21.4 billion. Siemens secured major contracts for data centers for cloud and AI infrastructure, mainly in the United States, as Busch explained in a conference call. He expects the boom there to continue. According to the company, Digital Industries recorded double-digit percentage growth in new business in both automation and software. The order backlog reached a record €120 billion.
Group revenue rose eight percent on a comparable basis to €19.1 billion. Industrial business earnings rose by 15 percent to €2.9 billion, exceeding analysts' expectations. The Digital Industries division showed particularly strong improvement, but all other core businesses also posted significant gains.
Net profit for Siemens was €2.2 billion, which is 43 percent less than in the prior-year quarter, when the company had benefited from the multi-billion euro sale of its Innomotics drives division. Adjusted for this, earnings per share before certain purchase price effects rose from €2.22 to €2.80.
Siemens has been focusing on expanding its digital business for some time. Last year, the group made billion-euro acquisitions in the US with Altair and Dotmatics. These are intended to help grow the digital business by an average of 15 percent per year through 2030 and double its revenues from €9.4 billion in the last fiscal year, as the company announced at its capital markets day at the end of last year. Siemens also plans to invest €1 billion in its AI offerings over the next three years, with increasing funds flowing to the US, China, and India.
There were no new details on the planned spin-off of Siemens Healthineers. Siemens plans to provide more information in the second quarter. The group intends to separate from its medical technology subsidiary. In a first step, 30 percent of the DAX-listed company is to be distributed to Siemens shareholders, preferably in the form of a spin-off. Investors have long called for this move, as Healthineers' business has no synergies with Siemens and ties up substantial capital./nas/niw/stk
