Siemens lifts mid-term outlook as AI-driven data centre demand boosts orders (updated)

Siemens AG

Yesterday 06:15

Recasts, adding CEO comment on data centres in paragraph 3 and from paragraph 12, share price in 4
Mid-term annual revenue growth target rises to 7% to 11% 
Fourth-quarter industrial profit jumps 22% 
Siemens to distribute one Healthineers share for every two Siemens shares held
By John Revill
ZURICH, Nov 12 (Reuters) - Siemens SIEGn.DE on Thursday reported better-than-expected fourth-quarter results and raised its mid-term growth outlook, as strong demand for trains and AI-related data centres continued to boost orders. 
CEO Roland Busch said he was not worried about any slowdown in data centre construction, after concerns about increasing political scrutiny of projects had triggered a selloff of tech stocks last week.
 The current uncertainty over the future of Nvidia NVDA.O founder and CEO Jensen Huang amid an alleged spy scandal would also not affect collaboration between the AI chipmaker and Siemens, Busch added.
Siemens' shares rose 4.7% in early trading in Frankfurt following the results.
The German engineering group, whose products range from trains to electrical gear for factories, buildings and data centres, said industrial profit jumped 22% to €3.89 billion ($4.31 billion) in the three-month period ended September 30.
The figure, the highest ever posted by Siemens, beat forecasts for €3.71 billion in a company-compiled consensus of analysts.
Revenue rose 11% to €23.68 billion, exceeding forecasts of €23.39 billion, while orders surged 58% to a record €34.77 billion.
The jump in orders was largely fuelled by large contract wins at Siemens' Mobility division and its Smart Infrastructure business, which supplies data centres.
Power distribution equipment, cooling gear and digital simulations of facilities are among the products Siemens provides for data centres.
 Based on the company's €143 billion order backlog, which includes €7 billion for data centre products, as well as a pick-up in industrial markets, Siemens now expects mid-term comparable annual revenue growth of 7% to 11%, up from its previous forecast of 6% to 9%.
 "We see major opportunities ahead for our business. We see powerful growth trends and strong key markets," Busch told reporters.
Siemens said its orders for data centres had doubled during the quarter. 
 Busch pointed to broad consensus in the US about the importance of data centres for economic growth. 
 "Having those dynamics in mind, there's nothing that worries us, at least not for the next couple of years," Busch said.
Siemens also gave details on its plans to reduce its stake in Siemens Healthineers SHLG.DE, saying it would transfer 34.1% of its stake to shareholders on the basis of one Healthineers share for every two Siemens shares.
     
($1 = 0.9027 euros)

(Reporting by John Revill; Editing by Linda Pasquini, Sherry Jacob-Phillips and Sharon Singleton)
((John.Revill@thomsonreuters.com; +41 41 528 36 37; Reuters Messaging: john.revill.thomsonreuters.com@reuters.net/))