Shares in Siemens rose 7 percent on Tuesday after Europe's biggest industrial group surprised the markets with the strength of its first-quarter results and raised its full-year earnings forecast.
Despite slowing growth in China and weak oil prices that have depressed capital spending, Munich-based Siemens reported a 10 percent jump in industrial profit and its first quarter of organic revenue growth in a year.
"We cannot make our customers buy more but we can do more productivity in our company and innovate more," Chief Executive Joe Kaeser told CNBC TV ahead of the annual shareholder meeting, claiming success for a self-help regime of cuts and divestments.
The results, which were also boosted by the weak euro, were markedly more upbeat than those of U.S. and Dutch rivals General Electric and Philips.
Siemens now expects earnings per share of 6.00 euros to 6.40 euros ($6.50 to $6.94) for its financial year through end-September, up from its previous forecast of 5.90 to 6.20 euros.
By 1105 GMT (6:05 a.m. ET), Siemens shares were up 7 percent to 89.27 euros, their highest level since China-led turmoil took hold of global stock markets at the beginning of the year.
"The robust industrial performance in the quarter has set Siemens up to be one of the best performers this results season. We expect the stock to outperform peers slightly," UBS analyst Fredric Stahl said, who rates Siemens "buy".
Siemens' performance was driven by its healthcare, transportation and energy-management divisions.
The Digital Factory division, with whose help Siemens hopes to narrow a still yawning profitability gap with GE, lost almost 2 percentage points from its profit margin due to slowing demand from China. The business supports manufacturers with a range of technologies.
Transportation and energy management won a series of large orders while Siemens' healthcare division -- like that of Philips -- rebounded in China from a low base a year ago.
Kaeser said Power and Gas margins would likely hit a low this year, arguing that demand for oil would continue to drive demand for Siemens' services even if depressed prices stymied capital expenditure in the sector.
Siemens widened its exposure to the oil and gas markets with the ill-timed $7.8 billion acquisition of U.S. oil equipment maker Dresser-Rand last year.
Investors seem prepared to look beyond the oil risk to see that Siemens is still relatively lowly valued - at 12.6 times 12 month forward earnings, below GE's multiple of 18.8 and Philips' 14.0, according to Thomson Reuters data.
Siemens' 10.4 percent industrial profit margin last quarter was an improvement but still far below GE's 18.3 percent.
To boost margins and build on its traditional strengths, Siemens is adding a software layer to its electrification and automation operations.
It announced on Monday night it was buying U.S. industrial software firm CD-adapco for $970 million, the latest in a string of acquisitions in the area.
Kaeser said Siemens had seen a strong pickup in demand from China for such factory software last quarter, amid a general environment of weak spending on capital equipment that lopped 2 percentage points of its Digital Factory unit profit margin.