Siemens Shares End At 10-Month High On September Quarter Earnings Beat
Shares of Siemens Ltd. rose to the highest in 10 months after the company’s September quarter earnings surpassed analysts’ estimates on most fronts.
Net profit of the capital goods player, which follows the year ending Sept. 30 as its financial year, fell 1.1% year-on-year to Rs 330.2 crore—higher than the Rs 175.1-crore consensus estimate of analysts tracked by Bloomberg.
The company’s revenue fell 9% from a year ago to Rs 3,894.4 crore—higher than the consensus estimate of Rs 3,566 crore.
Operating profit rose 5.5% to Rs 456 crore, against the estimated Rs 243.2 crore. Lower cost of materials and other expenses resulted in its Ebitda margin expanding by 180 basis points to 12.9%.
Segmental Performance (Year-on-Year)
- Energy business revenue fell 5.1% to Rs 1,583 crore.
- Smart infrastructure business revenue fell 14.8% to Rs 920.8 crore.
- Mobility business revenue fell 12.9% to Rs 328.8 crore.
- Digital industries revenue fell 12% to Rs 632.8 crore.
“Despite the volatility in business environment with core industrial sectors being negatively impacted, there are now signs of an uptick across some market segments post lockdown,” the company’s Chairman and Managing Director Sunil Mathur was quoted as saying in a statement. “We see increased interest in our technological and digitalisation solutions across all our business and we are closing working with our customers in these areas.”
The company declared a dividend of Rs 7 per share during its fourth quarter.
“Siemens is a long-term play on the infrastructure modernisation, industrial automation and emerging opportunities from digitalisation and import substitution,” Macquarie analyst Ajinkya Bhat wrote in a post-earnings flashnote.
On Thursday, Siemens’ shares ended 11.2% higher—the biggest single-day gain since May 2014—at Rs 1,488.95 apiece. The stock is trading 19.2% higher than its 12-month consensus price target of Rs 1,224.8. Out of the 26 analysts that track the company, 13 recommend ‘Buy’, five suggest ‘Hold’ while eight recommend ‘Sell’.