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Siemens Reports Strong Q3 Results Amid Mixed Order Trends
On Thursday, the renowned German industrial technology firm Siemens announced its quarterly operating profits, which surpassed analysts’ expectations, while also reaffirming its full-year financial outlook.
For the quarter ending in June, Siemens reported an industrial profit of 3 billion euros (approximately $3.3 billion), reflecting an 11% increase compared to the same period last year. This figure exceeded the analyst consensus compiled by the company.
However, the company also noted a 15% drop in comparable orders year-over-year, amounting to 19.8 billion euros. While there was significant order growth observed in its digital industries and smart infrastructure segments, the mobility sector experienced a marked decline.
Addressing these results, Siemens CEO Roland Busch characterized the company’s performance for the quarter as “very, very strong.” Following the earnings announcement, the company’s stock saw a minor decrease of 0.65% by 9:30 a.m. London time, while the broader pan-European Stoxx 600 index fell by 1.13%.
Siemens attributed its robust growth in the third quarter to solid demand in its electrification and industrial software sectors, yet acknowledged that the automation division continues to face formidable challenges.
The firm highlighted “exceptionally high order growth” within the software division, which resulted from several substantial contract wins for licensed software. This surge in profitability effectively offset declines recorded in their automation segment.
In discussing the performance, Siemens reported that Smart Infrastructure had achieved a broad-based increase in profitability year-over-year, driven by higher revenue, improved capacity utilization, and ongoing enhancements in productivity.
During a conference call following the earnings report, CEO Busch indicated that replicating the gains seen in the software sector might be challenging going forward, as conveyed by Reuters.
Siemens had previously noted a significant deceleration in its automation business, and during the latest report, confirmed its overall outlook for the financial year. However, it adjusted its revenue growth forecast to the lower end of the anticipated range, now expecting a 4%-8% increase.
In his remarks to CNBC, Busch attributed this tempered forecast to “difficult market environments,” citing issues such as weakness in industrial markets and a persistent inventory buildup that would require time to normalize.
Despite these challenges, he expressed confidence in Siemens’ current portfolio, highlighting the integration of artificial intelligence as a crucial element to support its customers across various sectors. “All in all, we’re looking forward to what comes,” Busch concluded.
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