Siemens beats forecasts despite energy fall

German industrial giant Siemens reported Thursday better than expected results for the third quarter and raised its guidance for 2016 as a whole, despite headwinds from the global energy markets and European Union political turmoil.

Joe Kaeser, chief executive of Siemens, told CNBC Thursday: “The conditions in the marketplace are not exactly giving us a lot of tailwind, so we are having to manage opportunities, which we believe there are plenty of. The oil and gas sector is struggling a lot, but on the other hand that is an opportunity because we need to help our customers get their costs down.”

The industrial giant hiked its forecast for earnings per share from net income for the full year to 6.5-6.7 euros ($7.2-$7.5), up from a previous estimate of 6 to 6.4 euros. Kaeser said the company is “well on our way” in restructuring. Siemens’ share price rose by around 3 percent in early trading on Thursday.

Net profit for the three months to the end of June was 1.33 billion euros, higher than analysts’ forecasts for 1.2 billion euros.

Siemens was boosted by large orders at its power and gas and energy divisions, despite declining oil and gas prices.

‘New game is efficiency’

“The new game is efficiency,” Kaeser said. “There’s not so much growth in the world.” He spoke of “pockets of excellence” such as renewable energy where Siemens could thrive.

However, he maintained earlier warnings about the geopolitical turmoil facing companies – which has been a key theme of this earnings season.

“The single biggest risk is geopolitical. If people are not feeling well about the prospects in the world, that’s something which is preventing them from investing more,” Kaeser said.

He was one of several European chief executives who warned of the dangers of the U.K. leaving the European Union ahead of its historic referendum in June.

Kaeser said he believed it was his duty to speak out ahead of the referendum.

“The U.K. has voted, and just three days after the vote I took my whole management team to the U.K … we want to be good corporate citizens,” he added.

Source: CNBC