German industrial giant Siemens has logged a substantial surge in profit for its most recent quarter, prompting it to raise its net earnings estimate for 2016 - the perfect setting for its shareholder meeting.
Against the backdrop of a shareholder meeting on Tuesday, Siemens reported a staggering 42 percent rise in net profit for its October to December quarter (year-on-year).
With revenues and orders also increasing considerably, the Munich-based company lifted its earnings estimate for the whole of 2016, saying it expected moderate revenue growth despite a slowing global economy and geopolitical trouble spots.
Siemens raised its profit estimate for the year from 5.90-6.20 euros ($6.40-$6.70) per share to 6-6.40 euros per share.
"We have good cause for confidence that 2016 will be a comparitively good year for Siemens," CEO Joe Kaeser told shareholders in Munich.
His statement sent Siemens shares 5.8 percent higher on the Frankfurt Stock Exchange, where they were the biggest gainer in morning trade on the blue-chip DAX-30 index.
Core business in focus - risks and opportunities
The maker of trains, power turbines, factory automation products and medical imaging machines is still in a huge restructuring process. It's planning to acquire US simulation software supplier CD-adapco for $970 million.
Its software is used by 14 of the 15 biggest carmakers, but also by aeronautics and energy companies. Siemens expects the transaction to be completed in the second half of its fiscal year.
Last year, the German industry giant bought US oil equipment firm Dresser-Rand in the hope to profit from the country's former fracking boom. But the sector has come under increasing pressure as crude oil prices plummet, raising fears of possible write-downs among Siemens shareholders.
hg/cjc (dpa, Reuters)