Munich: German industrial conglomerate Siemens raised its profit outlook on the back of cost cuts and strong recovery of products sensitive to economic swings.
Europe’s biggest engineering group said on Thursday it expected total profit sectors -- or operating profit of all three core businesses -- to be “more than” €7.5 billion ($9.99 billion) for the fiscal year to September 2010 versus 7.47 billion the year earlier.
Its original forecast was €6.0-6.5 billion before any restructuring and one-offs. The revised forecast was in line with the average forecast of €7.68 billion in a Reuters poll of analysts.
Siemens disclosed its second-quarter to March operating profit rose 16% to €2.14 billion, taking the first-half figure to €4.39 billion.
The second-quarter figure was well above the average forecast of €1.97 billion in a Reuters poll.
Siemens said in March its second-quarter operating profit and new orders would weaken from the first quarter despite a brighter outlook for its core business, and that it was benefiting from cost cuts to absorb an economic slump.
Most analysts had predicted the world’s biggest producer of industrial robotics would lift its guidance after the company stunned the markets in January with strong fiscal first-quarter results.
Siemens’ range of products, from turbines and fast trains to hearing aids and lightbulbs, makes it a bellwether of the euro zone’s largest economy.
Rivals have also published positive results, helped by a strong recovery among original equipment makers as well as building and infrastructure investment in China and other emerging markets.
French electronic engineering group Schneider Electric reported a forecast-beating 2.3% rise in first-quarter sales and left its outlook for 2010 unchanged, forecasting an EBITA margin of around 14% before restructuring costs.