Siemens Energy Sees Profit Boost From Rising Grid, Turbine Sales

(Bloomberg) -- Siemens Energy AG shares jumped the most in five months after the company substantially raised its sales and profit outlook for the year on growing demand for gas turbines and grid technologies. 

The German manufacturer expects net income to reach as much as €1 billion ($1.1 billion) this fiscal year through September, up from a previous estimate that it would stay around break-even. Comparable revenue could grow as much as 15%. 

Siemens Energy shares, which have more than tripled in value over the past year, soared as much as 14% in Frankfurt, the biggest intraday gain since November.

Companies like Siemens Energy and ABB Ltd have benefited from a flood of investment in power-hungry data centers that’s driving orders for circuit breakers and transformers. Growing global energy demand is also boosting orders for Siemens Energy’s gas turbines, which more than doubled in the three months through March. The company’s overall profit before special items more than quintupled.

Siemens Energy provides “a rare earnings upgrade story,” Morgan Stanley analyst Max Yates said in a note. “The momentum in gas turbine orders continues to run well ahead of expectations.”

Meanwhile, the company’s beleaguered Gamesa wind-turbine unit almost halved losses in the past quarter to €249 million excluding special items, with revenues rising 16%.

(Updates with additional details throughout.)

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