15 November 2023, Bavaria, Munich: Flags with the word “Siemens” in front of the company’s headquarters. Siemens publishes figures for fiscal year 2022/23. Photo: Karl-Josef Hildenbrand/dpa (Photo by Karl-Josef Hildenbrand/picture alliance via Getty Images)
Karl-Josef Hildenbrand | Picture Alliance | Getty Images
German industrial technology giant Siemens on Thursday posted better-than-expected quarterly operating profit and confirmed its full-year outlook.
Industrial profit came in at 3 billion euros ($3.3 billion) in the quarter to the end of June, 11% higher than in the same quarter a year ago. The figure was also above the company-complied analyst consensus.
Comparable orders meanwhile declined 15% from the same quarter a year ago, hitting 19.8 billion, Siemens said. It noted that order volume increased in the double digits in its digital industries and smart infrastructure businesses, but declined sharply in the mobility business.
Siemens CEO Roland Busch told CNBC on Thursday that the company’s performance during the quarter was “very, very strong.”
Shares were 0.65% lower at 9:30 a.m. London time on Thursday. The pan-European Stoxx 600 index was trading down 1.13%.
The company attributed its growth in the third quarter to strong demand in its electrification and industrial software businesses, but noted the automation business remained “challenging.”
There was an “exceptionally high order growth in the software business driven by a number of large contract wins for licensed software,” the company said, with profitability growth more than offsetting a profit decline in automation.
“Smart Infrastructure continued its broad-based increase in profit and profitability year-over-year on higher revenue, increased capacity utilization and ongoing productivity improvements,” the company added.
In a call after the earnings were released, Siemens CEO Busch told journalists that it would not be possible to repeat the gains in the software business in the same way, according to Reuters.
Siemens flagged a sharp slowdown in its automation business during its previous results.
The business on Thursday also confirmed its outlook for the full financial year, but noted that comparable revenue growth for the Siemens Group was expected to come in at the lower end of the projected 4%-8% range.
Speaking to CNBC, Busch attributed this projection to “difficult market environments,” adding that key issues were industrial market weakness and continued stock build up, which would take time to reduce.
He said that the company had the right portfolio and was charging it with artificial intelligence to support customers.
“All in all, we’re looking forward to what comes,” Busch said.