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Siemens Lifts FY16 Earnings View As Q1 Profit, Orders Jump


German conglomerate Siemens AG (SIEGY, SMAWF, SIEGY) reported Tuesday a 42 percent jump in its first-quarter profit with strong growth in Industrial Business profit as well as the absence of prior year's negative impacts. Revenues and orders also increased. Further, the company raised its earnings view for fiscal 2016.

Joe Kaeser, President and Chief Executive Officer, said, "We delivered a strong quarter and are well underway in executing our Vision 2020. Therefore, we will raise our earnings outlook for 2016, even though the macroeconomic and geopolitical developments remain a concern for our markets."

For the first quarter, net income climbed to 1.56 billion euros from last year's 1.10 billion euros. Basic earnings per share were 1.89 euros, compared to 1.30 euros last year.

Industrial Business profit climbed 10 percent year-over-year to 2 billion euros, including margin expansion.

Revenues increased 8 percent to 18.89 billion euros from 17.42 billion euros last year, driven by double-digit revenue growth in Power and Gas, Healthcare and Mobility. These more than offset a significant decline in Wind Power and Renewables.

First-quarter orders went up 27 percent year-over-year to 22.8 billion euros with major contract wins in Europe and Africa.

Excluding currency translation effects, revenue was up 4 percent, and orders were 22 percent higher. On a comparable basis, revenues edged up 1 percent and orders grew 19 percent.

The company noted that orders were up in all industrial businesses. Power and Gas had a 1.6 billion euros order for a power plant in Egypt while Wind Power and Renewables had a 1.0 billion euros order for an offshore windfarm in the UK.

For fiscal 2016, Siemens now expects basic earnings per share of 6 euros to 6.40 euros, compared to its previous estimate of 5.90 euros to 6.20 euros.

The company sees moderate revenue growth, and orders materially exceeding revenue for a book-to-bill ratio clearly above 1.

For Industrial Business, the company expects a profit margin of 10 percent to 11 percent.

In Germany, Siemens shares settled at 86.38 euros on Monday, up 2.31 percent.

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