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Adidas & Siemens lead German earnings race

Thursday, May 04, 2017 - 01:48

Shares in Adidas have risen to a record high after the German sportswear firm reported a bigger-than-expected increase in first-quarter sales and profits. As Sonia Legg reports, it's one of several major German firms reporting better than expected earnings

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Three-D printed soles - launched last month - were part of a push by Adidas to react faster to changing fashions. It's one of the reasons the German sportswear firm is outpacing rival Nike in North America and China. Quarterly net profit rose 30 percent to just under half a billion dollars. Sales were also up by a fifth, sending shares to a record high. And it's not just because US consumers are snapping up the latest running shoes. (SOUNDBITE) (English) NEIL WILSON, SENIOR MARKETS ANALYST, ETX CAPITAL, SAYING: "I think German companies are always going to do well. But I think the big benefit that they've got at the moment is a weak euro. It's historically weak against the dollar - its also a lot weaker than the Deutsche mark would be if they had that." To prove the point German industrial giant Siemens is also firing on all cylinders. Quarterly orders, revenues and profits were all up - industrial business profit by 18 percent. All the figures beat expectations - and reflected the economic trend. The latest service sector data also pointed to healthy Q1 growth. But while Germany thrives others see risks - and not just in the euro zone. (SOUNDBITE) (English) NEIL WILSON, SENIOR MARKETS ANALYST, ETX CAPITAL, SAYING: "It's certainly an issue at the moment with Donald Trump having talked about current account surpluses on bilateral trade and all that kind of thing. Germany does run a huge current account surplus and that's offloading trouble to other people." Germany's success may well help the Chancellor as she prepares for an election in September. But Angela Merkel knows the race isn't won yet - even though the risk of a political shock in neighbouring France has subsided ahead of the presidential vote there on Sunday.

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Adidas & Siemens lead German earnings race

Thursday, May 04, 2017 - 01:48