ZURICH Reuters -- Siemens shares surged on Thursday after the engineering company increased its full year sales and profit guidance and said it had made a flying start to its new business year.
The stocks-to-industrial-software group's stock was 7.1% higher in early trading, hitting its highest level since January 2022 and making it the second biggest gainer in the Stoxx Europe 600 Industrial Goods Services Index.
Siemens reported better-than expected quarterly profit at its industrial business late on Wednesday and raised its full-year sales and profit guidance.
The results, which had been due on Thursday, Siemens said that it now expects full-year revenue growth of 7% to 10%, up from its previous forecast of 6% to 9%.
Supply chain bottlenecks are easing, Chief Executive Roland Busch told reporters on Thursday, and the company's goal was to shorten delivery times.
Siemens is working through a record 102 billion euro $110 billion order backlog that will generate around 40 billion euros in revenue in the next three quarters, according to the company. We will leverage our exceptional order backlog and execution strength after our flying start to fiscal 2023. Busch said that this gives a high confidence level despite a volatile environment.
I'm confident that we'll reach our growth targets. Busch said that many countries had started investment programmes in areas such as semiconductors or to combat climate change with green technologies.
Chief Financial Officer Ralf Thomas said that the investment mood within the industry was also healthy, not only in traditional manufacturing but also in food and beverage and pharmaceuticals production.
Siemens had stockpiled its own inventories to keep supplies, and was able to offset higher wages and raw material costs with productivity gains and price increases, Thomas said.
JP Morgan analyst Andrew Wilson said that this is a good start to the year.