Source: AFP
German industrial giant Siemens said on Thursday that its quarterly profit rose sharply, driven by demand for manufacturing software as well as an “explosion” in artificial intelligence and customers upgrading power grids.
Net profit was 1.98 billion euros ($2.2 billion) from April to June — up about 50 percent from a year earlier and higher than analysts’ forecasts — on revenue of 18.9 billion euro.
Siemens, whose sprawling global business spans from building trains and factory equipment to systems that run data centers, said its software business had performed strongly, winning a number of major contracts.
The group’s electrification arm also grew by more than 20 percent, CEO Roland Busch said.
“We are benefiting from the artificial intelligence boom and the accelerating energy transition,” he told reporters after the results were released.
Read also
The stock of Warner Bros. Discovery sinks with quarterly loss of $10 billion
“On the one hand, many new data centers are being built and on the other hand, power grids are expanding to accommodate more renewable energy.”
The group’s “smart infrastructure” division, which includes the e-mobility business, said overall revenue was up 10% on the previous year.
However, sales fell in its industrial automation business, which covers areas such as factory automation.
Orders were down 16 percent overall from the same quarter in 2023, although that period saw a significant increase in train orders.
The “mobility” division, which includes the train business, saw orders fall by 70%.
The Munich-based group confirmed its outlook for revenue growth of 4 to 8 percent during the 2024 fiscal year, which runs until the end of September.
But he warned that the bottom line would likely be at the lower end of that range, with Bush saying “the economic situation in China and Europe remains difficult.”
Read also
Disney Beats Quarterly Revenue Estimates, Changes Streaming Earnings
“Recent macroeconomic indicators show that difficult conditions for industrial demand continue,” he added.
In its key market of China, demand remained “muted”, Siemens said.
Shares in the group fell about half a percentage point on the Frankfurt stock exchange after the results.
Siemens has long been a producer of heavy industrial equipment, but in recent years has tried to shift its focus to digital technology and factory automation.
Source: AFP
