November 15, 2023, Bavaria, Munich: Flags with the word “Siemens” in front of the company's headquarters. Siemens publishes the figures for the 2022/2023 financial year. Photo: Karl-Josef Hildenbrand/dpa (Photo by Karl-Josef Hildenbrand/Image Alliance via Getty Images)
Karl Josef Hildenbrand | Image Alliance | Getty Images
German industrial technology giant Siemens on Thursday reported better-than-expected quarterly operating profit and confirmed its full-year outlook.
Industrial profits reached 3 billion euros ($3.3 billion) in the quarter ended in late June, up 11% from the same quarter last year. The figure was also above the analyst consensus that the company complied with.
Meanwhile, comparable orders fell 15% compared to the same quarter last year, to 19.8 billion, Siemens said. It noted that order volumes increased by double digits in its digital industries and smart infrastructure businesses, but fell sharply in its mobility business.
Siemens CEO Roland Busch told CNBC on Thursday that the company's performance during the quarter was “very strong.”
Shares were down 0.65% at 9:30 a.m. London time on Thursday. Stoxx 600 Index The index fell by 1.13%.
The company attributed its third-quarter growth to strong demand for its electrical and industrial software businesses, but noted that its automation business remains “challenging.”
The company said there was “exceptional growth in demand in the software segment driven by a number of large contracts won for licensed software,” with profitability growth offsetting lower profits in the automation segment.
“Smart Infrastructure continued to grow its revenue and profitability broadly year-on-year, driven by higher revenues, increased energy utilization and ongoing productivity improvements,” the company added.
In a phone call after the earnings announcement, Siemens CEO George Bush told reporters that it would not be possible to replicate the gains in the software sector in the same way, according to Reuters.
Siemens pointed to a sharp slowdown in automation business during its previous results.
The company also confirmed its full-year outlook on Thursday, but noted that comparable revenue growth for the Siemens group is expected to come in at the lower end of the expected 4%-8% range.
Speaking to CNBC, Bush attributed the forecast to “challenging market environments,” adding that the main issues were the weakness in the industrial market and the continued buildup of inventory, which will take some time to reduce.
He said the company has the right portfolio and is equipping it with AI to support customers.
“Overall, we're looking forward to what's to come,” Bush said.
