Siemens Earnings Boosted by Demand

Siemens has announced a robust industrial profit of 3 billion euros ($3.3 billion) for the quarter ending June, marking an 11% increase compared to the same period last year. This figure surpassed analyst expectations, driven by significant order volume growth in its digital industries and smart infrastructure sectors. However, the mobility business experienced a sharp decline in orders, raising concerns about its future performance. Despite this, CEO Roland Busch described the quarter's results as "very, very strong," although shares dipped 0.65% in early trading. The company attributed its third-quarter growth to heightened demand in electrification and industrial software, while acknowledging ongoing challenges in the automation sector. Siemens reported "exceptionally high order growth" in its software division, fueled by several large contract wins. This growth in profitability more than compensated for a decline in the automation business, which has been flagged as a concern in previous results. In a post-earnings call, Busch cautioned that the software business's gains may not be easily replicated in the future. He reiterated the company's outlook for the full financial year, projecting comparable revenue growth for the Siemens Group at the lower end of the 4%-8% range. Busch attributed this conservative forecast to "difficult market environments," including industrial market weakness and ongoing stock build-up. Looking ahead, Busch expressed optimism about Siemens' future, emphasizing the company's strategic focus on artificial intelligence to enhance its portfolio and support customers in navigating current market challenges.