Siemens shares jump after engineering giant raises profit outlook

Shares in Europe's biggest engineering company Siemens rose sharply on Thursday after the group posted strong quarterly earnings and raised its profit forecast for the second time this year.

Munich-based Siemens said it now expects its full-year earnings per share to come in at between 6.5 euros (7.2 dollars) and 6.7 euros, up from its previous estimate of 6-6.4 euros.

Profit from the group's key industrial operations climbed 20 per cent to 2.19 billion euros in the three months to the end of June compared with the same period last year, Siemens said. Siemens' fiscal year runs through to September.

The company had performed well "in an increasingly difficult market environment," said Siemens chief executive Joe Kaeser.

The Siemens chief also pointed to the progress the company has made in rolling out its restructuring programme as contributing to the group's financial results. Known as Vision 2020, the restructuring programme was launched in May 2014.

The revised profit outlook and solid quarterly earnings led to Siemens' shares jumping by 4.13 per cent to 100.80 euros in late morning trading on the Frankfurt Stock Market.

Siemens stock has now climbed 12 per cent since the beginning of the year.

Group revenue in the three months ended June rose 5 per cent to 19.8 billion euros, while orders rose 6 per cent to 21.1 billion euros, Siemens said.

The gain in orders reflected large contracts for its power and gas operations as well as strong demand for the company's wind-turbines.

Group net profit for the quarter was down 2.1 per cent at 1.33 billion euros compared with 1.38 billion euros booked last year.

However, net profit in the quarter under review was higher than analysts' forecasts of 1.14 billion euros.

Last update: Thu, 04/08/2016 - 12:47

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