(Bloomberg) — Siemens AG’s two main units reported higher-than-expected first-quarter profit, adding to evidence that Germany’s manufacturing titans have gotten a big boost from China’s economic recovery. The shares gained.
The engineer’s digital industries unit saw adjusted earnings before interest, taxes and amortization climb to 848 million euros ($1 billion) in the quarter that ended in December, beating a consensus estimate of 592 million euros, the company said late Thursday. Profit at the infrastructure division rose to 391 million euros, also ahead of expectations .
Siemens is due to report its full results on Feb. 3. The company said it will review its 2021 guidance in light of the divisions’ outperformance. In November, Siemens predicted that fallout from the coronavirus crisis would burden EBITA at the two units, with only moderate earnings growth expected.
Demand from China, which has managed to contain the pandemic and last quarter roared back to pre-pandemic growth rates, has given key support to global trade and to some of Germany’s biggest exporters.
Siemens rose as much as 6.1% in Frankfurt trading and was up 5% at 130 euros at 9:25 a.m. Analysts at Deutsche Bank AG said the “much stronger-than-expected” results could translate into Siemens beating EBITA expectations by 20% when the group figures are announced.
The company has weathered Covid-19 better than some of its automotive and industrial clients partly because it was able to keep its factories running virtually uninterrupted. It’s also had an easier ride than U.S. rival General Electric Co., which is reliant on aviation customers hit by the collapse in air travel.
Siemens’s mobility unit, a leading manufacturer of train equipment, missed market expectations with 219 million euros of adjusted earnings. The global market for train equipment and maintenance services shrank last year, with lockdowns in major economies drastically cutting passenger numbers in cities and elsewhere.
(Updates to add shares in fifth paragraph)