Shares of Siemens AG surged approximately 6 percent during the morning session on Germany's XETRA, following the company's announcement of an optimistic revenue forecast for fiscal year 2025. This outlook came in conjunction with its fourth-quarter report, which revealed increased profits and order volumes.
Additionally, Siemens President and CEO Roland Busch has hinted at potential workforce reductions, with up to 5,000 positions potentially at risk in the factory automation division. This move addresses underperformance in the automation sector of the Digital Industries branch.
Busch stated in the earnings announcement, "As we look towards fiscal 2025, Siemens is poised for a next-level advancement in value creation. Our commitment to investing in research and development, along with mergers and acquisitions, will drive accelerated growth deriving from our technological strengths and scaling capabilities across various sectors. Our intended acquisition of Altair underscores our leadership in industrial software and artificial intelligence, with an unmatched ability to integrate the physical and digital realms."
The company pointed to sustained robust demand in areas such as electrification, transportation, and industrial software, contrasting with ongoing challenges in the automation business.
For fiscal 2025, Siemens forecasts basic earnings per share before accounting for purchase price allocations (EPS pre PPA) ranging from 10.40 euros to 11.00 euros, excluding the proceeds from the Innomotics divestiture.
Siemens anticipates recording an approximate gain of 2.0 billion euros after tax in the first quarter of fiscal 2025.
For fiscal 2024, the EPS pre PPA stood at 10.54 euros, excluding a positive contribution of 0.61 euro per share from Siemens Energy Investment.
The company also projects a comparable revenue growth trajectory of 3 percent to 7 percent for the upcoming fiscal year, having experienced a 3 percent rise in comparable revenue to 75.9 billion euros in fiscal 2024.
This forecast assumes moderate macroeconomic expansion in 2025, tempered by ongoing geopolitical uncertainties, including ongoing trade disputes. The manufacturing sector faces persistent challenges due to overcapacity and sluggish consumer demand.
However, infrastructure markets, particularly in electrification and mobility, demonstrate resilience, according to Siemens.
For Digital Industries, the company expects full-year comparable revenue to fluctuate between a 6 percent decline and a 1 percent increase, with a profit margin ranging from 15 percent to 19 percent.
Smart Infrastructure anticipates comparable revenue growth of 6 percent to 9 percent with a profit margin from 17 percent to 18 percent, while Mobility projects revenue growth between 8 percent and 10 percent and a profit margin spanning from 8 percent to 10 percent.
Siemens has proposed a dividend increase to 5.20 euros per share, up from the previous year's 4.70 euros.
During the fourth quarter, Siemens reported a net income rise to 2.1 billion euros from 1.9 billion euros in the previous year.
Quarterly revenue increased to 20.8 billion euros from 20.6 billion euros compared to the prior year, a 2 percent rise on a comparable basis.
The quarterly results reflected expansions in Smart Infrastructure, Mobility, and Siemens Healthineers, largely countered by downturns in Digital Industries’ automation business.
Order volumes climbed to 22.9 billion euros from last year's 21.2 billion euros, propelled by robust growth in Mobility and significant gains in Smart Infrastructure. Orders increased by 10 percent on a comparable basis.
On Germany's XETRA, Siemens shares were trading at 189.88 euros, marking a rise of 5.84 percent.
