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Siemens profit ahead of forecast despite digital sector orders fall

2024.02.08 02:29


© Reuters. FILE PHOTO: The brand of German industrial group Siemens is seen at an workplace constructing in Zug, Switzerland December 1, 2021. REUTERS/Arnd Wiegmann/File Photo

By John Revill

ZURICH (Reuters) -Siemens reported first-quarter profit barely ahead of expectations on Thursday despite the German engineering group seeing a slowdown at its flagship manufacturing facility automation unit.

Digital Industries, which provides corporations with software program and controllers to function their manufacturing strains, noticed new orders fall by a 3rd as market circumstances weakened.

Customers who constructed up shares of elements to keep away from shortages final 12 months additionally held off shopping for new tools and determined to run down their shares, Siemens mentioned.

The downturn was seen most strongly in Asia and Australia, due significantly to weakening demand from China, it added.

Although the scenario in China was bettering from the earlier quarter, Siemens mentioned it anticipated circumstances to stay robust in its third greatest market after the U.S. and Germany.

“We anticipate regional differences in the way customers ultimately reduce their inventories to normal levels,” Chief Executive Roland Busch advised reporters.

“Depending on the speed and scale of its economic recovery, China might take somewhat longer.”

A stronger efficiency from its train-making Mobility enterprise helped offset the downturn, whereas Siemens’s constructing automation arm Smart Infrastructure had its best-ever quarter.

Like different industrial corporations Siemens’s outcomes are seen as a proxy for the broader international economic system.

Busch mentioned the Red Sea transport disaster was having “practically no impact” on Siemens, on account of its native provide chains and expertise in dealing with such issues.

Overall, Siemens reported an increase in industrial profit of 3% to 2.72 billion euros ($2.93 billion) for the three months to the top of December, beating forecasts of 2.64 billion euros in a company-gathered consensus of analysts.

Revenue rose 2% to 18.41 billion euros, under the 18.58 billion euros forecast after foreign money translation results – primarily from a stronger greenback – diminished gross sales reported in euros.

Siemens confirmed its full 12 months outlook, saying it nonetheless anticipated income development of 4% to eight%, after divestments and when foreign money results are eliminated.

The firm’s have been indicated 1.5% increased in premarket exercise on the German trade.

Busch pointed to an order backlog, which now stood at 113 billion euros as giving him confidence for the long run.

($1 = 0.9276 euros)

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