Siemens profit beats forecasts helped by accounting gain

ZURICH Siemens posted better-than-expected industrial profit for its third quarter as the German engineering group weathered the effects of the coronavirus pandemic.

Orders and revenue both fell during the three months to the end of June, but the trains to industrial software maker still increased the operating profit of its industrial business, helped by an accounting gain and savings to deal with the COVID-19 downturn.

Siemens said adjusted industrial profit for the three months to the end of June rose 8% to 1.79 billion euros ($2.13 billion), beating analyst forecasts for 1.17 billion euros in a company-gathered consensus.

The result was helped by a 211 million euro gain in the valuation of Siemens’ stake in American industrial software company Bentley Systems, which offset declines elsewhere.

“Despite the severe global crisis, we delivered strong operating performance,” Chief Executive Joe Kaeser said in a statement

Siemens had previously warned that it expected the COVID-19 outbreak to have big impact on its results on its third quarter when it abandoned its full year guidance and announced it was speeding up its existing cost-cutting plan in May.

Like other industrial companies including France’s Schneider Electric and Switzerland’s ABB, Siemens has been hit by factory and office shutdowns introduced to prevent the spread of the coronavirus.

On Thursday Siemens, which is due to spin off its gas turbine business next month into a new company called Siemens Energy, said its third quarter revenues fell 5% to 13.49 billion euros, beating forecasts for 12.75 billion euros.

As a result shareholder’s net income halved to 539 million euros, although far ahead of the 51 million euros expected by analysts.

The Munich company said it still expected the pandemic to “strongly impact” its business during in its next quarter, adding it expected a moderate decline in full year revenues.