On Thursday, Siemens reported that, due to the normalization of market demand in China and other markets, its industrial profit for the three months ending in June fell by 4% to 2.75 billion euros ($3.02 billion), which was below the analysts' forecast of 2.9 billion euros.
Siemens' products are widely used in areas such as factory automation and transportation network equipment. Through its performance and financial conditions, investors can not only understand the changes in demand in major economies but also observe the growth prospects of the global economy.
The financial report also showed that the company's revenue grew by 6% to 18.89 billion euros, with a net profit of 1.44 billion euros, both falling short of expectations. Siemens CEO Roland Busch stated that the company's operational performance this quarter was slightly below expectations, leading to revenue and profit not meeting forecasts.
Siemens Group maintained its overall outlook for the end of September, expecting the overall business's outlook to remain unchanged. However, it lowered its expectations for its Digital Industries business, which provides controllers to factories. This division, considered the jewel in Siemens' crown by analysts, now expects a comparable revenue growth of 13% to 15%, not the previously forecasted 17% to 20%.
Siemens CEO Roland Busch mentioned that demand has relatively weakened after clients pre-purchased products in previous quarters to avoid shortages. They have noticed that demand is gradually returning to normal, especially in the Chinese market and some short-cycle business areas.
Data released by Siemens showed a 37% decrease in order volume for its Digital Industries in the second quarter, especially in the short-cycle factory automation business. Orders declined in all regions, particularly in Siemens' third-largest market—China.
In recent months, purchasing manager data from Europe and China showed that economic activity is gradually weakening, leading to a slowdown in manufacturing activity. Recent data indicates that, despite the ongoing slump in German industry, orders from Germany continue to grow. Germany, Siemens' second-largest market, saw a 10% increase in orders in the third quarter to 24.24 billion euros, surpassing the expected 22.19 billion euros.
At present, the future outlook for the Digital Industries does not seem optimistic. However, supported by factors such as increased capacity utilization in this sector, Siemens still maintains the entire group's profit guidance expectations. The company expects a comparable revenue growth of 9%-11% for the 12 months up to the end of September, with earnings per share expected to be between 9.60 and 9.90 euros.
