Siemens upgrades forecast after Q1

GERMANY: Turbine manufacturer Siemens has increased its financial year forecast after a strong first quarter, which saw net income rise by 25% year-on-year.

Siemens wind business' profit increased by 119% in Q1 the firm said
Siemens wind business' profit increased by 119% in Q1 the firm said

As a whole, the Siemens industrial group saw revenues increase 1% to €19.1bn in the first quarter of its financial year, while net income grew to €1.9bn, up from €1.5 billion a year earlier.

Due to its "strong start to the year", Siemens increased its forecast for 2017 profit margin from 10.5%-11.5% to 11%-12%. It also increased its earnings per share from €6.80-€7.20 to €7.20-€7.70.

In Q1 2017, the profit margin increased to 13% from 10.4% a year earlier. Earnings per share were also up 25% from €1.89 to €2.35, the company said.

For its wind business unit, profit increased by 119%, the company said with revenue increasing from €1.2bn to €1.4bn.

However, order totals fell 24% compared to the same period in 2016 to €1.4bn.

Siemens said this was due to an exceptionally high Q1 2016 which included a €1bn offshore wind order.

"Strong profitability [was] driven by the revenue increase, higher productivity, positive effects related to project execution, higher capacity utilisation, and a larger contribution from the service business," Siemens said.

Siemens' merger with rival wind turbine manufacturer Gamesa is expected to be finalised by April 2017.

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