Siemens AG raised its annual guidance after better-than-expected sales and profit in its first quarter to Dec. 31 last year, the latest sign Europe’s biggest engineering company is benefiting from a strong rebound in China.
Siemens now sees full-year net income rising to as much as 5.5 billion euros (US$6.6 billion) from 4.2 billion euros last year, clearly above previous expectations for moderate growth, it said yesterday.
That is after comparable revenue increased in all four of its industrial businesses, including at its high-margin software segment.
Photo: AP
“Some of the industries we lead have recovered clearly faster than expected,” co-chief executive officer Roland Busch said. “China stood out clearly here: The Chinese economy has recovered from the downturn, and its gross domestic product is now higher than it was before the [COVID-19] pandemic.”
The raised outlook is a boon to long-time boss Joe Kaeser, who was to hand over the reigns of the German conglomerate to Busch later yesterday.
During his seven-year run, Kaeser streamlined Siemens’s sprawling conglomerate structure to help it focus on high-margin businesses, such as its factory-automation software.
Demand from China, which has roared back to pre-pandemic growth rates, has given key support to global trade and to some of Germany’s biggest exporters, including automakers Volkswagen AG and BMW AG.
Still, Siemens cautioned that it continues to expect a “complex” macroeconomic environment because of the pandemic and said its outlook is based on economies continuing to recover.
“It’s very uncertain what the global development will do in terms of both supply chain as well as, of course, on the demand side,” Kaeser said in an interview on Bloomberg TV.
“That’s why it’s so important that we get the vaccine rolled out to everybody,” he said.
Group sales rose 7 percent on a comparable basis in the first quarter, with operating profit at its industrial business jumping 39 percent.
In China, Siemens won orders to help BMW increase manufacturing capacity and digitize the factories of a local glassmaker.
In Egypt, the company signed a memorandum of understanding to build the country’s first high-speed rail system.
Siemens has weathered the pandemic better than some of its automotive and industrial clients partly because it was able to keep its factories running virtually uninterrupted.
It has also had an easier ride than US rival General Electric Co, which is reliant on aviation customers hit by a collapse in air travel.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said that its investment plan in Arizona is going according to schedule, following a local media report claiming that the company is planning to break ground on its third wafer fab in the US in June. In a statement, TSMC said it does not comment on market speculation, but that its investments in Arizona are proceeding well. TSMC is investing more than US$65 billion in Arizona to build three advanced wafer fabs. The first one has started production using the 4-nanometer (nm) process, while the second one would start mass production using the
When an apartment comes up for rent in Germany’s big cities, hundreds of prospective tenants often queue down the street to view it, but the acute shortage of affordable housing is getting scant attention ahead of today’s snap general election. “Housing is one of the main problems for people, but nobody talks about it, nobody takes it seriously,” said Andreas Ibel, president of Build Europe, an association representing housing developers. Migration and the sluggish economy top the list of voters’ concerns, but analysts say housing policy fails to break through as returns on investment take time to register, making the
‘SILVER LINING’: Although the news caused TSMC to fall on the local market, an analyst said that as tariffs are not set to go into effect until April, there is still time for negotiations US President Donald Trump on Tuesday said that he would likely impose tariffs on semiconductor, automobile and pharmaceutical imports of about 25 percent, with an announcement coming as soon as April 2 in a move that would represent a dramatic widening of the US leader’s trade war. “I probably will tell you that on April 2, but it’ll be in the neighborhood of 25 percent,” Trump told reporters at his Mar-a-Lago club when asked about his plan for auto tariffs. Asked about similar levies on pharmaceutical drugs and semiconductors, the president said that “it’ll be 25 percent and higher, and it’ll
CHIP BOOM: Revenue for the semiconductor industry is set to reach US$1 trillion by 2032, opening up opportunities for the chip pacakging and testing company, it said ASE Technology Holding Co (日月光投控), the world’s largest provider of outsourced semiconductor assembly and test (OSAT) services, yesterday launched a new advanced manufacturing facility in Penang, Malaysia, aiming to meet growing demand for emerging technologies such as generative artificial intelligence (AI) applications. The US$300 million facility is a critical step in expanding ASE’s global footprint, offering an alternative for customers from the US, Europe, Japan, South Korea and China to assemble and test chips outside of Taiwan amid efforts to diversify supply chains. The plant, the company’s fifth in Malaysia, is part of a strategic expansion plan that would more than triple
RSS