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Siemens, Europe’s biggest industrial conglomerate, announced late Tuesday that it had increased its profit forecast for this year after booking higher-than-expected profits for the quarter ending December 31.

The German company said it now expects basic earnings per share of €7.20 – €7.70, from €6.80 – €7.20. It also increased its outlook for profit margins in its closely watched industrial group to 11 – 12 per cent, from 10.5 – 11.5 per cent.

Joe Kaeser, chief executive, called the raised guidance “a clear signal” that his Vision 2020 plan was moving forward.

Siemens said net income in its first quarter jumped 25 per cent to €1.9bn, well above forecasts at €1.37bn. Profit across its industrial businesses were up 26 per cent year-over-year to €2.5bn, against forecasts at €2.15bn.

Orders in the quarter were 14 per cent below the prior year on a comparable basis.

But Siemens said profit margins in its industrial businesses jumped from 10.4 per cent a year ago to 13 per cent and it cited “significant margin expansion in most industrial businesses.”

Its digital factory unit led the expansion, with an operating margin of 26.1 per cent, while profit in the unit soared 60 per cent to €668m, versus forecasts at €451m.

Siemens shares have been little changed this year after rallying by nearly a third in 2016, helped by a sharp gain following the election of US President Donald Trump, which was seen as bullish for industrial companies.

The group is due to release full details of its first quarter early on Wednesday, just ahead of its annual shareholders meeting.

Copyright The Financial Times Limited 2018. All rights reserved.

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