Siemens shares jump as CEO promises good year after strong start


Frankfurt (AFP)

German engineering giant Siemens said Tuesday it got off to a "strong start" to the year which its chief executive promised would be a "good one," sending the group's shares sharply higher on the stock exchange.

"We got off to a strong start into the new fiscal year, and we did that in the face of a difficult geopolitical and economic environment," CEO Joe Kaeser told a news conference in Munich.

"And despite the continuing macroeconomic and geopolitical turbulence, we have good cause for confidence that 2016 will be a comparatively good year for Siemens," he added.

Siemens runs its business year from October to September and it booked a 42-percent jump in net profit on an eight-percent increase in revenues in the first three months.

Net profit totalled 1.557 billion euros ($1.7 billion) in the period from October to December, up from 1.095 billion euros a year earlier.

First-quarter revenues amounted to 18.891 billion euros and new orders climbed by 27 percent to 22.801 billion euros, Siemens said.

On the basis of the three-month figures, the group said it was raising its forecast for earnings per share for the whole year to 6.00-6.40 euros from 5.90-6.20 euros previously.

"We anticipate further softening in the macroeconomic environment and continuing complexity in the geopolitical environment in fiscal 2016," Siemens said.

"Nevertheless, we expect moderate revenue growth. We anticipate that orders will materially exceed revenue," it continued.

Siemens said it expected "momentum in the market environment for our high-margin short-cycle businesses (to) pick up in the second half of fiscal 2016."

The group's confidence sent Siemens shares higher on the Frankfurt stock exchange, where they were the biggest gainers on the blue-chip DAX 30 index, adding 5.8 percent in a slightly softer market.