Siemens boosts forecast with AI focus under new CEO
Siemens Boosts Annual Outlook Amid Strong Q1 Performance
Frankfurt-based industrial giant Siemens has significantly raised its annual outlook following a robust first quarter, driven by increased investments in artificial intelligence. This positive performance comes alongside other major industrial companies, such as France’s Schneider Electric, which have also seen benefits from the expansion of data centers in the United States. These facilities provide the essential computing power required for AI development and operations.
The company reported core earnings of €2.9 billion (US$3.4 billion) for the first quarter ending December, marking a 15% increase compared to the previous year. Revenue also saw growth, rising 4% to reach €19.1 billion. According to Siemens, this growth was spread across various sectors within the company, but the infrastructure division experienced particularly strong results. This division is responsible for producing much of the electrical equipment necessary for data centers.
“Several large contract wins from data center customers, primarily in the US, contributed to this increase,” said Siemens. The company attributed the rise in order intake mainly to its electrification and electrical products businesses.
In response to the improved financial performance, Siemens has updated its earnings per share (EPS) forecast for the year. Previously, the company projected EPS to be between €10.40 and €11.00. It now expects it to fall within the range of €10.70 to €11.10.
Despite the positive developments, net profit fell by 43% due to a comparison effect. This decline can be partly attributed to the sale of Innomotics, an industrial motor manufacturer, during the first quarter of the previous year.
Siemens CEO Roland Busch expressed confidence in the company's current position, stating that it is “very well positioned” to capitalize on emerging opportunities. He emphasized the company’s efforts to scale industrial AI within its core industries through partnerships with world-class collaborators.
Under Busch’s leadership, Siemens has shifted its focus towards higher-margin software products. This strategic move aims to leverage data collection to assist customers in automating their processes more efficiently. By integrating advanced software solutions into its traditional industrial offerings, Siemens is positioning itself to remain competitive in an increasingly digitalized market.
